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STANDARDS OF PUBLIC MORALITY 



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AMEBICAN SOCIAL PBOGRESS SEMES 

STANDARDS OF PUBLIC 
MORALITY 

BY 
AETHUR TWINING HADLEY, 

PRESIDENT OF YALE UNIVERSITY 



THE KENNEDY LECTURES FOR 1906, IN THE SCHOOL OP 

PHILANTHROPY, CONDUCTED BY THE CHARITY 

ORGANIZATION SOCIETY OF THE CITY 

OF NEW YORK 



TStfo If 0tfe 

THE MACMILLAX COMPANY 

LONDON: MACMILLAN & CO., Ltd. 
1912 

AH rights reserved 









COPYRIGHT, 190T, 

Bt the maomillan company. 



Set up and clectrotyped. Published June, 1907. Reprinted 
March, 1908; June, 1911 ; June, 1912. 



• 



NorteootJ 19rfBB 

J. S. Cushing Co. — Berwick A Smith Co. 

Norwood, Maas., U.S.A. 



PREFACE 

The five chapters of which this book is composed 
were delivered as lectures on the John S. Kennedy 
Foundation in New York in November and December, 
1906. The manner of treatment and choice of illus- 
trations show that they were originally intended for 
the platform rather than for the printed page. It 
has not, however, been thought wise, in so short and 
unpretending a book as this, to make any serious 
change in their form. 

Should any one take up this book a few years hence, 
the author hopes he may find that, though the events 
in the foreground have changed, the underlying prin- 
ciples yet remain of value. 

New Haven, May, 1907. 



vii 



CONTENTS 

CHAPTER PAGE 

I. The Formation of Public Opinion . . 1 

II. The Ethics of Trade 31 

III. The Ethics of Corporate Management . 63 

IV. The Workings of our Political Machinery 97 
V. The Political Duties of the Citizen . 129 



CHAPTER I 



THE FORMATION OF PUBLIC OPINION 



* 



CHAPTER I 

THE FORMATION OF PUBLIC OPINION 

ONE of the strangest features in the life of the 
American people at the present day is the 
contrast between its standards of private and 
of public morality. 

In private the typical American citizen bears an 
excellent character. With the weak he is courteous ; 
with the strong, self-respecting; with all, helpful. 
He uses his powers and advantages unselfishly. He 
does not employ his strength to elbow his way to the 
front through a crowd of women and children. He 
does not employ his cunning to overreach his neighbors 
and friends. In great emergencies, like fire or flood or 
railway accident, it is not the mean and selfish side 
of human nature which comes prominently to the front 
in the conduct of our countrymen, but the large and 
helpful side. We are glad to believe that the heroism 
shown at these times of crisis is but a manifestation 

[3] 



STANDARDS OF PUBLIC MORALITY 

of the ordinary intentions and ideal- of our American 

men and women, wliieli they are showing in thousands of 

little acts of daily self-sacrifice of which we never hear. 

But with our public moral- the case i- different. In 
each of our two chief form- of organized social activity 
— business and politic- — we have to record a different 

Story. The man whom you could trust to help a weaker 
neighbor will nevertheless go to all lengths to hurt a 
weaker competitor for money or for office. A man who 
in private life would despise snobbishness and servility 
of every kind will in business or politics cringe to the 
stronger power for the sake of hi- own persona) advan- 
The instinct to serve others which we feel in 
our private relations gives place to an instinct to serve 
ourselves in commercial or political ones. And when 
some special emergency draws puhlie attention to the 
real method- which men are using and the real stand- 
ards to which they hold, like the insurance investiga- 
tion in New York or the political upheaval in St. Louis, 
we find ourselves confronted, not with unexpected 
ts of self-sacrificing heroism, but with unexpected 

deptl Ifish deceit. 

[4] 



THE FORMATION OF PUBLIC OPINION 

The man who hears the results of recent ir 
tions is apt to exclaim against the depravity of the men 
who manage oar business or oar politic. This is a 
very superficial way of looking at the matter. If hone 

and there some individual misuses his monev or his 

« 

office, we are justified in patting the blame upon him 
individually. But if a laige number of people are 
misusing their money or their offices, the fault cannot 
be theirs alone. The community is a partaker in that 
fault. The chief trouble lies in the public standard 
of morals. A great majority of the industrial and 
political leaders who have done the most harm are very 
excellent men according to their lights. They are kind 
to zh~ : .r :\\z::ots. :r.:i :: :z.- : .z iririi.Is. :.-i r-rA;;" to 
make almost any effort to help those to whom they 
deem jhcmsribes inder obligation. Bfosl of them 
would scorn to tell a He except in the way of business, 
as the old proverb runs. If an investigation shows 
them the real character of the things they have been 
doing, they die of broken hearts — not, as people com- 
monly think, because they are afraid of going to jail, 
but because they are honestly ashamed and repentant. 

[5]" 



STANDARDS OF PUBLIC MORALITY 

The blame for misuse rf industrial or political power 
i-, I repeat, ours jusl as much as theirs. Por it is the 
standards that arc at fault, and we as well as they have 

a -hare in untiring the standards. 

"What!" you will say, "are we, who never owned 
a share of railroad stock in our lives, to blame for 
railroad rebates? Are wc, who pay the prices charged 
by monopoly, to blame for the abuse of the power of 
industrial combination?" Yes. The man who in 
his <>wn grocery store encourages his clerk to let the 
Scales Weigh a little too heavy for the customer who 
not notice or is too self-respecting to make a fuss 
about it, ha- deprived himself of the chance of saying 
anything effective against railroad rebates. The man 
who ha- tried to create^ an artificial demand for labor 
by -low work or unfinished work, or any other of the 
device- known to the trade, has become a partaker 
in the responsibility for all the worst evils for which 
he has upbraided the great monopolists. Any con- 
demnation of trusts on his part i- a mere matter of 
word-. He i- abusing them for doing on a large 
scale what he ha- been trying to do on a -mall scale. 

[«] 



THE FORMATION OF PUBLIC OPINION 

In like manner, the man who contributes to cam- 
paign funds because he regards such contributions as 
good investments has deprived himself of the chance 
of criticising corrupt politics. The man who in the 
choice of representatives or advocacy of measures 
looks to his own interest instead of the interest of 
the body politic is a partaker in the political sins 
under which we suffer. 

The chief cause of difference between our private 
and our public morality is that public sentiment is 
clear in one case and obscure or self-contradictory 
in the other. In private life we despise in ourselves 
and our friends the things which we condemn in our 
enemies. This makes our condemnation effective. 
In public matters, whether of business or of politics, 
our judgment is too often that of the lips rather than 
of the heart. We condemn a man for succeeding 
when his success is detrimental to us; but for the 
most part we have allowed ourselves to get a little 
money or a little political influence by methods which 
are so much like his that it takes all the force out 
of our condemnation. No wrong was ever stopped 

[7] 



STANDARDS OF PUBLIC MORALITY 

by the talk of men who objected to that wrong chiefly 
because somebody else gol the benefit of it. No 
legislation ever did much real good when the people 
who made (lie laws were not ready to apply the under- 
lying principles of those laws against themselves. 

A few years ago the legislature <>f <>ne of our south- 
western Mate"- passed a most stringent act punishing 
commercial combination by line and imprisonment; 
providing, however, that nothing in that law should 
apply to combinations of cattlemen. A law against 
the stranger, an exception in favor of one's self and one's 

friend- ! Unfortunately this is a type of commercial 
statute and commercial morality which is all too preva- 
lent to-day. 

We may prevent certain specific practices by statutes 
which make them misdemeanors; but in so doing wo 
have -imply cut off one way of reaching an end. Men 
will get the same result by another route. It is not 
enough to hinder men from obtaining money or office 
in certain specified ways. We must so shape their 
ambitions that they do not wish to obtain money <>r 
office by means that injure the community. We must 

[8] 



THE FORMATION OF PUBLIC OPINION 

get them to consider public selfishness as dishonorable 
a thing as we now consider private selfishness. If a 
man to-day crowds himself out of a theatre, leaving 
behind him a trail of bruised women and children, the 
very newsboy in the street will hiss him when he gets 
to the door. Such a man will be despised by the public, 
and in his heart he will despise himself, for taking ad- 
vantage of his strength to crush others. But if a man 
gets money or office by analogous processes, the world 
is inclined to admire the result and forgive the means ; 
and the man, instead of despising himself for his selfish- 
ness, applauds himself for his success. He applauds 
himself because others are in their hearts admiring 
him ; and as long as he has this admiration he cares not 
for editorial attacks, or denunciatory sermons, or even 
laws to restrain his activity. He takes these things as 
tributes — inconvenient but inevitable tributes — to 
the magnitude of his own success. 

The thing that governs us is public opinion — not 
the nominal public opinion of creed or statute book, 
but the real public opinion of living men and women. 
Whatever the intelligent and influential world regards 

[9] 



STANDARDS OF PUBLIC MORALITY 

ICOeSS, ambitious men will try to achieve. What- 
ever means the intelligent and influential world con- 
dones in its work, the ambit ions man will practice in 
his. On the other hand, whatever ends the world re- 
gard- a-- dishonorable, strong men will refuse to pursue; 
and whatever means people disdain to use in their own 
interest, the strong man will reject and spurn. This 
dependence upon public opinion is not simply a present 
fact; it is a necessary basis of all free government. 
Unless the strong men are bound by public opinion 
and can 1 for the approval of their fellow-men, civil 
liberty is impossible; people can only be held in their 
places by a system of tyranny. It is because men want 
to do what Others approve, and because they despise 
themselves unless they conform their own conduct in 
some measure to the standards and needs of those about 

them, that constitutional government is possible. 

J 'his common sentiment or sense of the 4 community, 
of which each man is the trustee, IS the 4 really active 
agenl in free government. Legislatures and courts, 

police and armies, may supplement its behests; they 

aever can take the place of them. The police 4 may 

[10] 



THE FORMATION OF PUBLIC OPINION 

occasionally arrest an individual ; the courts may some- 
times punish him ; but they cannot make a law sacred 
unless the majority of people acquiesce in its wisdom 
without waiting for the police to arrest them and for 
the courts to punish them. Legislation may render 
public opinion effective in some cases where its appli- 
cation would be obscure ; but legislation which attempts 
to anticipate public opinion instead of defining it be- 
comes a dead letter or a laughing stock. The boy at 
school recognizes the obligations imposed by the public 
opinion of his fellows far more clearly and consistently 
than he obeys the rules imposed by the master. The 
professional man will hold to his code of professional 
ethics after he has let all other ethics go ; for to forfeit 
the opinion of those with whom he is associated is a 
greater evil than to lose life or liberty or chances of 
eternal salvation. Once let public sentiment be clear 
on a certain point, so that a man will enforce it against 
himself just as much as he does against others, and 
public sentiment can accomplish anything. 

But why is there this difference in the way we enforce 
our standards of public and private morals ? Why do 

in] 



STANDARDS OF PUBLIC MORALITY 

we apply our rules of private morals strictly and our 
rules of public morals loosely? It is because our ex- 
perience in the one case bas been mucb longer than our 
experience in the other. Men have been trying to live 
in peace and harmony with those about them for bo 
many thousand years, that we know what is needed to 
keep the peace. But there have been so few hundred 
years since we began experimenting with the present 
commercial and industrial system, that we do not yet 
know what virtues are needed for its maintenance. 
We know pretty well what sort of duties a man ought 
to perform toward himself and toward his neighbor 
whom he can see. We are not sure what sort of obli- 
gations lie should recognize toward the larger world 
which he cannot see. 

Centuries of experience have made it perfectly ob- 
vious to us all thai intemperance is bad, that cruelty 
is bad, and that breach of personal trust i- bad; that 
a man should support his family, stand by his friends, 
and help those about him whim they are in trouble. 
These rules have become so well established that we 
apply them impersonally. We not only condemn our 

[i«] 



THE FORMATION OF PUBLIC OPINION 

enemies for breaking them, but we condemn our 
friends and ourselves with equal sharpness. In the 
field of private morals we have little difficulty in divid- 
ing people into good and bad. The good are those 
who fulfil the obligations and meet the moral standards 
which public opinion has set; the bad are those who 
repudiate the obligations and fall short of the standards. 
The ethics of the situation are generally clear. 

But in public morals, whether commercial or political, 
the case is quite different. The ethics of the situation 
are not generally clear. There is no such consensus 
of public opinion as to the obligations which a man 
ought to assume. Society, as I said a moment ago, 
has not had time to watch the consequences of selfish- 
ness in politics as it has watched the consequences of 
selfishness in private life. In private matters we have 
a definite code which meets certain clearly understood 
needs ; and we can say of the man who fails to meet 
its requirements that his morals are bad. In public 
matters our code is indefinite, and our understanding 
of what we really need is often obscure. Even if a 
man is doing great harm to his fellow-men through 

[13] 



STANDARDS OF PUBLIC MORALITY 

his blindness to public wants or his selfish adminis- 
tration of public trusts, we cannot be quite certain 
that he is morally bad. His fault may be due to 

defective ethics rather than to had morale He is not 

necessarily defying an obligation which he, in common 
with all other men, understands and recognizes; he 
may he failing to recognize an obligation because he 
does not understand it. 

We have no universal public opinion on these ques- 
tions. We have sections of public opinion, working 
separately and often pulling apart. The Tribune 
appeals with confidence to the public opinion of one 
set of people ; the Post to the public opinion of a 
somewhat different set; the Journal to the public 
opinion of a set far different from either. The facts, 
views, and motives which are familiar to the readers 
of one of these papers arc unfamiliar to the others. 
Each group believes that its opinion represents a real 
understanding of the needs of the people, and that the 
views of the other groups represent the arguments ^i 
selfish hypocrite-, doubly detestable because they take 
the form of an appeal to public interest. In the face 

[M] 



THE FORMATION OF PUBLIC OPINION 

of difficulties and schisms of this kind, it sometimes 
seems as if there were no common ground to which to 
appeal ; no set of facts sufficiently known to all men to 
serve as a starting-point in the discussion of public 
affairs; no opportunity for getting on to a universal 
basis of sympathy in the domain of public morals cor- 
responding to that on which we stand in our private 
morality. 

One of the great difficulties which beset the newspaper 
editor when he tries to discuss public questions is the 
fact that most of his readers have a strong pecuniary 
or personal interest in having them decided in some 
particular way. The man who owes money likes all 
the arguments in favor of a depreciating currency, and 
is suspicious of those on the other side. With the man 
who has money due him the case is reversed. The 
man who employs labor feels the need of giving the larg- 
est amount of control to him who risks his capital. 
The arguments in favor of the rights of the capitalist 
employers seem to him strong ; all efforts to limit those 
rights savor of immorality. The laborer, on the con- 
trary, who works for another man, feels that he, in 

[15] 



STANDARDS OF PUBLIC MORALITY 

giving his effort and perhaps risking his life, has far 
more to do with the product than the man who has 
simply invested his money. He looks with favor at 
every argument concerning the rights of labor, and with 
disfavor at any argument or precedent which seems to 
support the claims of capital. If an editor wishes to 
make his paper popular with a certain class, he lays stress 
on the arguments which that class likes and feeds them 
with the facts which they want to believe. His readers 
gradually get into a position w T here their prepossessions 
have been strengthened until they become prejudices, 
and where misinformation has been added to prejudice 
until it becomes almost irremovable. 

There are right w T ays and wrong ways of getting at 
economic truth. If we start from discussion of those 
present-day problems where people are most prejudiced, 
I think we are adopting the wrong way. A few years 
ago, when I w T as receiving final instructions for a some- 
what delicate negotiation, I said to my chief, "If the 
issue is forced upon us, there is, I think, nothing to do 
but to tell the truth;" and my chief, with the wisdom 
born of many years' experience, replied, " Even then, not 

[10] 



THE FORMATION OF PUBLIC OPINION 

butt end foremost" As long as we present truths con- 
cerning public policy butt end foremost to people who 
have an interest in not accepting them, we shall never 
carry conviction with us. But if we start from past 
history and study the development of the various rights 
and usages, we have a far better chance of arriving at a 
common understanding. People can look at the con- 
tests of past generations more dispassionately than at 
their own; and they are more ready to accept a legal 
or moral principle which bears a little hard upon their 
own interests if they see that it resulted from public 
necessities in the past than if they think it was specially 
trumped up for the occasion by some personal enemy 
of their own. I may be oversanguine in my confidence 
in what this historical study will do ; but I have gener- 
ally observed that when a man sees that a measure has 
been framed in the public interest he accepts its con- 
sequences, even when they hurt him personally; and 
that if he once believes that a general rule is a general 
rule and not a piece of class legislation directed against 
him and his friends, he will lend his aid in its enforce- 
ment. This way of looking at things is known as public 
c [17] 



STANDARDS OF PUBLIC MORALITY 

spirit; and it is because the American people has, at 
the bottom, a great deal of this public spirit, that it 

has been able to enjoy freedom for more than a century. 
If here or there this spirit to-day seems dormant, I 

believe that this is due more to the lack of clear under- 
standing of the problems at issue than to any deteriora- 
tion in our moral fibre which unfits us for the exercise 

of freedom. 

Therefore, when one man makes liberty his watch- 
word, and another democracy, and a third relies on 
constitutional safeguards; and when the three men, 
starting with these different premises of political ethics, 

reach diverse and irreconcilable conclusions ; — the 
only way of bringing them together is to trace the origin 
of liberty and of democracy and of constitutional safe- 
guards. When we look at the matter in this way, we 
shall see that not one of the three represents a funda- 
mental principle of morals or politics; that each has 
been adopted and accepted as a means to the strength 
and progress of the community, rather than as an end 
of strength and progress; that when any one of the 
three is thus made an end instead of a means, or re- 

[18] 



THE FORMATION OF PUBLIC OPINION 

garded as a postulate of right thinking instead of an 
incident of right living, it fails of the very purpose for 
which it exists. 

Five hundred years ago our ancestors had a coherent 
and well-defined system of public opinion on public 
matters as well as private ones. It was not what we 
should call a good system; but, such as it was, it 
commanded almost universal acceptance. The public 
opinion of those ages held that each man was born to 
fill a certain niche or place in society. His duties as a 
member of the body politic were sharply defined for 
him by a series of traditions. He was to take the same 
trade which his father had before him; to make such 
goods and charge such prices as were fixed by tradition 
and enforced by the magistrates ; to perform such part in 
public affairs, and only such part, as belonged to his 
station. At all points which the law could reach he was 
closely hedged about; and where the law could not 
reach him, public sentiment compelled him to accept 
the dictates of the Church as to what he should think 
and believe. Each man was but one very small wheel 

[19] 



STANDARDS OF PUBLIC MORALITY 

in a laige machine. Unless t licit wheel ran as had been 

ordered, men thought thai the whole machine would 

- fall out of gear. This was the essence of the feudal 

system. The codes of law with which we identify 
that system were but its externals. The real heart 
was found in its dominant public opinion, that kept each 
man in the place where he was born and set rules for 
all his actions as a member of an industrial and political 
community. 

But there came a time when people ceased to be 
content with the dictates of this inherited opinion — a 
time when they wanted to make their own place in 
society, and serve the community in their own way 
instead of the way which tradition prescribed. Such 
men were at first treated as heretics and reprobates. 
But the communities which gave ear to the new doctrines 
and tolerated the new methods prospered, while those 
which altogether strove to repress them fell behind. 
The new methods began to displace the old by a process 
of natural selection. 

At the end of the fifteenth century two events occurred 
which gave the death-blow to the old system of author- 

[«o] 



THE FORMATION OF PUBLIC OPINION 

ity, and paved the way for the development of the new 
system of liberty. One was the invention of printing; 
the other was the discovery of America. The former 
gave every man who had new truth to preach an op- 
portunity to spread it abroad, whether the authorities 
liked it or not. The latter gave to every man who had 
new modes of action to suggest a chance to try those 
modes on a large scale, free of the interference which he 
would have had at home. Slowly but surely the printed 
book had its influence in unsettling old methods of 
thought; slowly but surely the New World experi- 
ments had their influence in readjusting and reorganiz- 
ing Old World methods. There is no time to trace in 
detail the history of this change. Suffice it to say that 
in the course of four centuries we passed from a system 
of status, wherein each man was born into a set of rights 
and obligations which he could not change, to a system 
of liberty under which each man was encouraged to 
serve society in his own way for better or for worse. 

Speaking broadly, there is no doubt that this system 
has justified itself. " It reposes," to quote the admirable 
words of John Morley, "on no principle of abstract 

[21] 



STANDARDS OF PUBLIC MORALITY 

right, but on principles of utility and experience. Mr. 
Carlyle, and one or two rhetorical imitators, poured 
malediction on the many-headed populace, and with a 
rather pitiful impatience insisted that the only hope 
for men lay in their finding and obeying a strong man, 
a king, a hero, a dictator. How he was to be found, 
neither the master nor his still angrier and more impa- 
tient mimics could ever tell us. 

"Now Mr. Mill's doctrine [of liberty] laid down the 
main condition of finding your hero; namely, that all 
ways should be left open to him, because no man, nor 
majority of men, could possibly tell by which of these 
ways their deliverers were from time to time destined to 
present themselves. Wits have caricatured all this, by 
asking us whether by encouraging the tares to grow, 
you give the wheat a better chance. This is as mislead- 
ing as such metaphors usually are. The doctrine of 
liberty rests on a faith drawn from the observation of 
human progress, that though we know wheat to be 
serviceable and tares to be worthless, yet there are in 
the great seed-plot of human nature a thousand rudi- 
mentary germs, not wheat and not tares, of whose 

[ « ] 



THE FORMATION OF PUBLIC OPINION 

properties we have not had a fair opportunity of assur- 
ing ourselves. If you are too eager to pluck up the 
tares, you are very likely to pluck up with them these 
untried possibilities of human excellence, and you are, 
moreover, very likely to injure the growing wheat as 
well. The demonstration of this lies in the recorded 
experience of mankind." 

This is the true doctrine of liberty. But there are a 
great many people who, seeing the truth of this doctrine, 
have taken a further step that converts its truth into 
falsehood; who believe that because we have found it 
wise to let individuals serve society in their own way, 
we may therefore let them have their own way in every- 
thing, with the assurance that they will serve society 
in spite of themselves ; that the selfishness of all men, 
pulling apart and working for their own interest, can 
by some occult process be trusted to promote the com- 
mon interest. For this extreme theory there is not one 
shadow of justification in human history. But in these 
days true and false doctrines of liberty are so inter- 
woven that the men who see the good of the right kind 
of liberty are prone to shut their eyes to the evils of the 

[23] 



STANDARDS OF PUBLIC MORALITY 

wrong kind; while those who see the evils of the wrong 
kind of liberty arc equally blind to the inestimably 
great good which the right kind of liberty accomplishes. 
To kings and nobles and prelates, and other bene- 
ficiaries of the feudal system, the doctrine of liberty in 
it- true form, no less than in its false one, was a very 

unwelcome thing. As a matter of course, they resisted 

it. In some countries, notably in Spain, they were suc- 
cessful, and succeeded in checking the growth of lib- 
erty at the loss of national vitality and national progress. 
But in England, in France, and in Germany, the forces 
on the two sides were more evenly balanced. There 
was a conflict which lasted for centuries between the 
feudal governments on the one hand and the champions 
of liberty on the other. Out of the resistance of these 
governments to liberty grew the modern system of 
democracy. The people as a body tried to take the 
business of governing into their own hands, as a means 
of preserving liberty against the encroachment of 
privileged classes. The fundamental theory of this 
democratic movement was that all just government was 
based on the consent of the governed. 

[24] 



THE FORMATION OF PUBLIC OPINION 

This underlying theory of democracy was as sound 
as the underlying theory of liberty. Unfortunately it 
was just as easily subject to perversion. Not content 
with saying that all just government was based on the 
consent of the governed, the enthusiastic advocates of 
democracy held that if you could only find what a 
majority of the governed wanted, you could wisely 
incorporate it into law. Never was there a greater 
practical error. Public law, to be effective, requires 
much more than the majority to support it. It requires 
general acquiescence. To leave the minority at the 
mercy of the whims of the majority does not conduce 
to law or good government or justice between man 
and man. Even Rousseau, the leading apostle of 
modern democracy, saw this most clearly. He said 
in substance: "A majority of the people is not the 
people, and never can be. We take a majority vote 
simply as the best available means of ascertaining the 
real wishes of the people in cases when it becomes 
necessary to do so." But Rousseau's followers, who 
believed in the infallibility of majorities, did not stop 
short in the application of their theory until they had 

[25] 



STANDARDS OF PUBLIC MORALITY 

produced the helpless anarchy which preceded the 

adoption of the Constitution of the United States, or 

the reign of terror which preceded the reestablishment 
of a strong persona] government in Prance. For the 
principles of extreme democracy and of extreme liberty, 
though often proclaimed by the same persons, are in- 
consistent in practice and in theory. The right of each 
man to consult his own interests and the right of a 
majority of men to sacrifice the interests of the minority 
are absolutely irreconcilable with one another. 

The people who were charged with the practical 
work of governing democratic countries saw this dif- 
ficulty; and they tried to provide against it by the 
adoption of constitutions. These constitutions erected 
traditional or vested rights as a bar against the e\< 
of individual liberty on the one hand; and. still more 
important, against the excesses of unrestricted powers 
of the majority on the other. The Constitution of the 
United State- is perhaps the best example of a practical 
instrument of this kind. The preamble indeed asserts 
unqualified rights to liberty and unqualified adherence 
to the principles of democracy; hut the instrument 

[<c] 



THE FORMATION OF PUBLIC OPINION 

itself is occupied with establishing safeguards for prop- 
erty and contract against the violence of liberty, and for 
orderly development of the law against the disorderly 
demands of majorities. The success of our Constitution 
has been so great that a very considerable proportion 
of our people make it the starting-point of their reason- 
ing on industrial and political morals. But the theory 
of the sovereignty of the Constitution is in effect a denial 
of the principles both of liberty and of democracy. 
There is nothing self-evident or axiomatic about the 
Constitution of the United States. It was adopted 
because the public opinion of Americans at the end 
of the eighteenth century acquiesced in the practical 
wisdom of its provisions. Those who take their stand 
on the letter of these provisions to-day are bound to take 
pains to keep public opinion of the twentieth century 
behind them — not simply their own public opinion 
and that of their friends, but of the great body of the 
governed on whose consent constitutional government 
must rest. 

Liberty, democracy, and constitutional government 
are each in their place invaluable means to the public 

[27] 



STANDARDS OF PUBLIC MORALITY 

interest. Liberty is essential to progress, democracy 
is needed to prevent revolution, constitutional govern- 
ment is requisite for that continuity and orderlin* 
of living without which no worthy life is possible. But 
when any one of these principles is made not a means 
but an cud which justifies it- use in the interests of a 
class, instead of the genera] interests of society, it 
becomes a menace instead of a protection. Liberty is 
good as a means of allowing each man to serve society 
in his own way; it is had when it is used as a means of 
allowing him to serve himself at the expense of society. 
Democracy is right when used as a means of keeping 
the government in touch with public opinion; it is 
Wrong when it encourages a temporary majority to say 
that their vote, based on insufficient information or 
animated by selfish motives, can he identified with public 
opinion concerning what is best for society as a whole. 
Constitutional safeguards are absolutely necessary to 
make any measure of liberty or democracy possible; 
but when they are used to protect the liberties of a 

class bent on its own interest rather than on the general 

interest of society, they cease to be a safeguard and 

[ M 1 



THE FORMATION OF PUBLIC OPINION 

become a source of peril. Applied unselfishly and with 
primary regard for the public interest, liberty, democ- 
racy, and constitutional law work to a common end. 
Applied selfishly, for the benefit of different classes, 
they are inconsistent in their results ; and any one of the 
three thus selfishly applied may become dangerous to the 
stability of social order. 



[29] 



CHAPTER II 



THE ETHICS OF TRADE 



CHAPTER II 

THE ETHICS OF TRADE 

IS a man justified in buying as cheap as he can, 
and selling as dear as he can? This double 
question is the fundamental one in the ethics of 
trade. If we say yes, how can we excuse the evils 
which result when we pay some people less than a liv- 
ing wage for the things that they produce, and give 
others extraordinary profits on things which have cost 
them little ? If we say no, where are we to draw the 
line between just profits and unjust profits in trade ? 

Different ages have answered this question quite 
differently. The ancients had no trouble at all with it. 
They said, "No, he is not justified either in buying 
cheap or in selling dear." The ancients not only gave 
this answer, but they went to the logical conclusion. 
They said : " All trade is a bad thing. It is robbery. 
In fact, it is a particularly cowardly mode of robbery." 
d [33] 



STANDARDS OF PUBLIC MORALITY 

nding to the ancient view, the man who went out 
and held lip 8 railroad train was a decidedly more 

respectable man morally than the man who made 
profit out of buying and selling the stocks of the road. 
For the man who held up the train risked his life in 

a fair fight, and the people who let him steal their money 
were coward-; while the man who bought the stock 
of the road cheap and -old it dear risked nothing, and 
very likely took away the money of respectable people 
who trusted him. Holding, as Aristotle did, that trade 
essentially base, he and his followers had no dif- 
ficulty in condemning the profits of trade. 

But however strongly the ancients might have urged 
this view in theory, they never were able to get it carried 
out in practice. Trade was a necessity, whether they 
liked it or not. The fact that the moralists stigmatized 
it as bad only prevented them from having the influence 
which they otherwise might have had on the way that it 
was conducted. Their position was like that of the chap- 
lain of the Spanish regiment to which Captain Dugald 
Dalgetty was attached: who, when the captain in- 
quired of him whether he might or might not lawfully 

[84] 



THE ETHICS OF TRADE 

do certain things, responded after the third glass of 
wine) that as he was bound to be damned as a heretic 
anyway a few sins more or less didn't seem to him to 
be a matter of any particular importance. The writings 

of the Roman lawyers frankly assume that trade is and 
must be independent of moral considerations. Paulus, 
for instance, states explicitly this fundamental prin- 
ciple of the civil law : "In buying and selling a man has 
a natural right to purchase for a small price that which 
is really more valuable, and to sell at a high price that 
which is less valuable, and for either to overreach the 
oth: 

Until the tenth or eleventh century the extreme news 
of the moralists on the one hand and the lawyers on the 
other were maintained side by side in irreconcilable 
shape. But in the later Middle Ages there was at least 
an approach toward reconciliation. The moralists 
of that period, of whom Thomas Aquinas was the great 
leader, recognized that trade was a necessary thing and 
that its profits were therefore to a certain extent legit- 
imate. They said that the gain itself was not bad, 
but the covetousness or unlimited desire to gain: and 

[35] 



STANDARDS OF PUBLIC MORALITY 

they attempted to arrange a system of ethics under which 
ju-t and moderate gains could be distinguished from un- 
just or immoderate ones. They held thai every article 
had its value or proper price, represented in a general 

way by the amount of labor which had been involved 

in its production. So long as a trader was content with 
a price of this kind, lie rendered a valuable service 
to society by giving it the articles it wanted in the places 
and times where they were needed; and he might prop- 
erly charge for that service as an essential element 
in the just price of the article. Some of the moralists 
went even farther, and said that in case of special 
scarcity of an article and exceptional need for its use, 
the trader might be held to have performed a service 
of exceptional value; and as long as he did not buy 
with the intention of making these exorbitant profits 
he might legitimately avail himself of them when they 
came through the <rift of Providence. This last con- 
cession was, however, exceptional. Most of the medi- 
aeval moralists held that it was as bad to take advan- 
tage of a scarcity as it was to deceive the public as to the 
kind of goods which were being sold. 

[36] 



THE ETHICS OF TRADE 

This idea that each article has a value or just price, 
based upon its cost of production, and that trade is 
moral or immoral according as the trader bases his 
charge upon this cost, was at one time quite universal, 
and is held by many persons even at the present day. 
It is the fundamental principle of Marx's book on 
Capital, the economic Bible of the socialist. But the 
attempt to carry this theory out in practice, to make it a 
workable standard for the conduct of trade instead of 
a somewhat vague economic ideal, has been attended 
with much difficulty. 

To begin with, while it makes provision against 
extortionate profits by the trader on some articles, it 
does not say how he is to be protected against losses on 
others. What will happen if buyers are not prepared 
to pay a price for the article which covers the cost of 
production ? You cannot compel a man to purchase 
when he would rather go without the article than pay 
the price charged. You cannot compel the trader to 
leave the goods unsold on his shelves because the just 
price is not forthcoming. You must let him sell at a 
loss, But if he sells some things at a loss and is only 

[37] 



STANDARDS OF PUBLIC MORALITY 

allowed a fair profit on others, his business in general 
Is a losing one. Be must Ik* allowed to make extra 
changes on the things that the public will buy, to 

make up for his failures on the things the public will 

not buy. 

But there is a deeper practical difficulty than this. 
r l ne attempt to prohibit a trader from selling an article 
for more than it cost may become disadvantageous to 
society as a whole. Take a concrete case, which was 
frequently occurring in mediaeval communities. There 
is a scarcity of wheat and a deficiency in the bread 
supply. Those who have the wheat or the bread to sell 
are anxious to put the price up. They are not allowed 
to do it. The Church threatens them with everlasting 
penalties in the next world; and, more immediate if 
not more important, the magistrates threaten to cut 
oil' their ears in this. Of course the price stays where 
it was. Xo man i> going to imperil his soul's salvation 
and his ears at the same time. The consequence is 
that as long as the supply lasts the consumption of 
bread goes on at the same rate as before. Then there 

i- ;t sudden and appalling famine in which whole villages 

[88] 



THE ETHICS OF TRADE 

are desolated. Contrast the working of the modern 
principle, of letting people charge whatever they can 
get. Those who own the food supplies raise their 
price- - - >n as they see the scarcity threatening. This 
enhancement of price causes people to be more eco- 
nomical in the use of bread, so that the old supply lasts 
longer. It also gives people a motive to arrange for 
the importation of wheat from other markets in time 
to prevent the most acute forms of famine. Of course 
there is some hardship. The poor feel the increased 
price of bread acutely: and when they see that this 
increased price goes to swell the profits of traders who 
had more money than the consumers to begin with. 
they are most jealous of the injustice. But the moder- 
ate hardship to the consumer when the price of bread 
begins to rise prevents the awful and appalling loss which 
he would suffer in seeing his children die before his 
eyes if all the bread in the community were used up; 
and the extra profit to the seller is a small price for the 
public to pay if the seller thereby is stimulated to bring 
in additional supplies before the acute stage of famine 

is reached. 

[39] 



STANDARDS OF PUBLIC MORALITY 

Whatever may be thoughl erf the old legal theory of a 
just price, the fad remains that almost every attempt 
to enforce that theory has intensified the evils it was 

intended to prevent. There are many men still 
in business who can remember the days in 1864 when 
Congress undertook to prevent speculators from putting 
up the price of gold; with the result that the pri< 
gold in two weeks went up to a height hitherto un- 
dreamed of, and that as much harm was inflicted on the 
Union cause a- would have resulted from the loss of half 
a do/en pitched battles. For high price- and abnormal 
profits in a particular line are not a cause of scarcity. 
They are a symptom of scarcity; and the man who 
attempts to treat the disease by repressing the symptom 
manifests hut little knowledge of the organization with 
which he i- dealing. 

It i- to the credit of the English judges that they -aw 
this truth. They worked out the true way to deal with 

the evils of high price-. Not by declaiming against the 
profits of trade a- unjust, but by encouraging more 

trader- to come in and cut down those profit-, was 

< v [<> he supplied with what it needed at reasonable 
[40] 



THE ETHICS OF TRADE 

rates. Where no such increase of supply or outside 
competition could be hoped for, then the courts would 
step in and fix a just price. More than two hundred 
years ago Lord Hale, in his treatise De Portibus Maris, 
laid down the true economic principle of rate regulation, 
as understood by the English courts. His position was 
in substance this. Where one man or one company 
has the sole right of wharfage or cranage in a town, 
then the law will tell what he may justly or unjustly 
charge; and where for any other reason there may 
be but one wharf or one crane available for the people 
of the town, the same reason for regulation will hold 
good. But where other wharves can be built or other 
cranes set up, this fact provides a more efficient means 
of control than any law possibly could. Is there scarcity 
of wharf accommodations ? Make it profitable for 
a competitor to supply such accommodations, and you 
have the surest guarantee that the deficiency w^ill be 
made good. Does the owner of a wharf try to make 
extortionate profits ? The quicker will those profits 
be cut down by some one else on account of his short- 
sightedness. If you fix an arbitrary price, there may 

[41] 



STANDARDS OF PUBLIC MORALITY 

be a permanent scarcity, where some of those who most 
want a thing will not gel it at all. It" you let the price 
fix itself, the men who want it most gel the thing for 
the moment, while the producers who charge unfair 
profit^ soon find the price reduced to the level of cost 
of production by the competition of others who enter 
the same line of business. 

Thi> is the common law doctrine of competition. 
It i^ usually identified with the name of Adam Smith. 
Adam Smith did great service in describing its effects 
upon the wealth of the nation as a whole. But the 
doctrine had gradually grown up under the sure touch 
of great jurists before Adam Smith was ever heard of. 
lie did but codify the theory of value which they had 
created. 

The results of applying Adam Smith's theory of 
trade were so much better than those which had fol- 
lowed from the mediaeval theory that the practical men 
of the nineteenth century accepted his views quite un- 
reservedly. Instead of saying that a just price was 
one which conformed to the cost of production, they 
said that a just price was one which was obtained under 

[4*] 



THE ETHICS OE TRADE 

fair competition in an open market. The competition 
of producers prevented it from getting too high: the 
competition of consumers prevented it from getting too 
low. The net result was a price that better met the 
nece- iety than any other: and the trader, 

as long as his actions were fair and above board, did 
a public service by producing this competitive market 
price which fully warranted him in pocketing any profits 
he could get. In the eyes of those who held this * 
any price which could be thus obtained, without fraud 
or concealment. itself and in itself a just price. 

It became a principle of the nineteenth-century trade 
ethics that producers, traders, and consumers, in trying 
to serve themselves intelligently and openly, served 
society also: or. in the words of General Walker, that 
in securing the best market for himself a man provided 
the best market for others. And the adoption of this 
ethical principle has had a bearing and a result quite 
outside of the limits of trade. A great many people to- 
day hold that under our present system of government 
and with our present standard of intelligence, a man 
who in any field of human activity serves himself in an 

[43] 



STANDARDS OF PUBLIC MORALITY 

open and straightforward manner is thereby serving 

others; that enlightened selfishness dictates nearly or 
quite the same course of conduct which would result 
from enlightened unselfishness; thai rational egoism 
produces as high a standard of general morality as we 

can expect to get. 

During the first half of the nineteenth century, it 
seemed as if these views were being justified — in 
trade at any rate, if not in other fields of human activity. 
During this period many thoughtful people were quite 
ready to accept competitive ethics as a solution of most 
of our commercial problems. But as the years have 
gone on it has become evident that something more is 
needed. Competition is a good medicine for some dlS- 
eases; but it certainly falls short of being a panacea 
for all. As time has gone on the opponents of com- 
petition have become more numerous, and are express- 
ing their ideas more loudly and more definitely. 

Their first charge is that modern trade, in its suc- 
cessful and brilliant forms, does not represent any real 
effort to meet public needs. They say that it is for the 
most part mere speculation. It either ignores public 

[44] 



THE ETHICS OF TRADE 

wants, in which case it is only gambling; or it antago- 
nizes those wants by efforts to manipulate the market, 
in which case it is conspiracy to rob the people. Modern 
trade ethics, they say, is no longer content with as- 
serting a man's right to buy what he wants as cheaply 
as possible, or sell what he has as dearly as possible; 
it encourages a man to buy what he does not want, 
or sell what he does not possess. Profits from trans- 
actions of this kind they consider to be mere robbery. 
This view of the matter is partly true and partly false. 
Every right-minded man must deplore the extent to 
which speculation is carried at the present day. A 
very considerable proportion of the transactions, even 
on the legitimate and recognized exchanges, are of the 
nature of gambling; and the case is far worse in the 
illegitimate exchanges, bucket shops, and other insti- 
tutions of similar character with which the country is 
cursed. Such transactions, though they nominally 
take the form of trade, are really a peculiarly dangerous 
kind of betting, which probably does more harm than 
betting on horse races or card games. The sums 

involved are larger. The transactions look so much like 

[45] 



STANDARDS OF PUBLIC MORALITY 

legitimate investment that many a man who would 
shrink from the associations of the poker table or the 

race track goes into speculation more or less uncon- 
sciously. Its apparenl resemblance to legitimate trade 
gives him B false sense of security and false confidence 
in his own judgment. It makes him ready to borrow 
Others' money to extend his operations. It renders him 
an easier prey to adverse chance or to the wiles of the 
professionals with whom he is dealing. It gives those 
professionals every facility to take all sorts of advantage 
of their inside information, at the expense of an ignorant 
public; and it encourages the less scrupulous element 
among them to circulate false statements concerning 
the value of the goods in which they deal, or to form 
conspiracies intended to influence that value, to the 
detriment not only of the misguided gamblers, but of the 
legitimate interests of trade. 

If all speculation were of this character, it would be 
easy to condemn and stop it. But side by side with this 
wrong side of speculation, which does much harm and 
no good, there is a right kind of speculation which seems 
to be an absolute necessity for the successful and regular 

[46] 



THE ETHICS OF TRADE 

conduct of modern industrial life. Much of the business 
of our larger exchanges is of this sort: and there is a 
still greater volume of these legitimate and necessary 
speculative transactions which do not get recorded in any 
exchange at all. Without this speculation, recorded 
or unrecorded, it would be impossible for the manu- 
facturer and merchant to do their work successfully 
on the scale at which it is done to-day. 

It is impossible to distinguish the two kinds of specu- 
lation, the right and wrong type, by the form of trans- 
action. Some people think that when a man sells what 
he has not got. it must necessarily be an objectionable 
sort of business. Yet nine-tenths of the transactions 
of many of our best cotton brokers are sales of cotton 
which they do not have, and which may not even be 
in existence anywhere. It is a necessity for the cotton 
manufacturer and his operatives to be able to run the 
mills as regularly as possible throughout the year. 
The farther ahead a manufacturer can take orders, the 
better it is for him and for his employees. He cannot 
attempt to store all the cotton which he wants for these 
future orders without sacrifice of interest and danger 

[47] 



STANDARDS OF PUBLIC MORALITY 

of fire. Large storage of unused goods represents a loss, 
not only to his own purse, bul to the resources of the 
community. On the other hand, he cannot afford to 

make a price for his future product — a necessary basis 
for any such orders — when he does not know what the 
cotton will cost him. What does lie do? He goes to a 
broker — a man who has familiarized himself with the 
acreage of cotton, the amount of supplies left over from 
the lasl season, and who, as time goes on, notes eveiy 
change in weather which is liable to affect the supply of 
the new crop, and every shift of public demand which 
will increase or lessen the amount at his disposal. 
Acting on the basis of his expert knowledge, the broker 
can forecast the prices of cotton for future delivery. 
lie can leave the manufacturer free to make the calcu- 
lations concerning the parts of his business in which he 
is well informed without loading himself with risks 
and burdens in a large department in which he is and 
must be very imperfectly informed. Of course, a cotton 
broker often makes mistakes and loses money; but his 
mistakes arc not so serious as those which the manu- 
facturer would make. He earns his profits. lie creates 

[48] 



THE ETHICS OF TRADE 

in the long run a better demand for the farmer's cotton 
than would otherwise be the case, and a better adapta- 
tion of acreage and agricultural wages to future needs 
than would be possible under any other system. 

What happens in the cotton business is paralleled in 
every other line of industry. If I am building a house, 
I want to know what it will cost ; and this I can know 
only when the dealers in timber and iron and lime are 
willing to make sales of these commodities for future 
delivery beyond the amount of those which they have 
stored in their warehouses or can afford to have. It is 
the power to forecast future supplies and demands 
which makes a modern trader render his best service 
to society. In old days, before the railroad and the 
telegraph were invented, large profits were secured and 
large public services rendered by putting goods on the 
market in the place where they were needed. The 
man who shipped wheat promptly from a spot where it 
was abundant to one where it was scarce prevented a 
famine, and reaped a rich but well-deserved reward for 
so doing. To-day the possibility of famine is mini- 
mized by the telegraph and the steamship. Word goes 
e [49] 



STANDARDS OF PUBLIC MORALITY 

from one market to another in a moment. A consign- 
ment comes back in a day. There is neither the op- 
portunity nor the need U)\- exceptional skill in sending 
these telegrams and making these transfers. Our 

trouble now is, not in having goods at the right place, 
but in having them at the right time, — in withdrawing 
them from the market when they arc 4 not needed, in order 
to place them at the disposal of that or some other mar- 
ket when they are needed. No telegraph can forecast 
the future. No steamship can transfer to the hereafter 
goods which are being wasted in the present. It is 
the much-abused speculator who, by buying what he 
does not want in the expectation of having it available 
when it is wanted, or by selling supplies which he does 
not control in the well-founded belief that he is going 
to be able to get them, keeps us from those wild fluc- 
tuations of trade 4 and grave crises in business whose evils 
form the counterpart in the twentieth century to the 
e\ lis of famine in ancient days. We cannot distinguish 
the right and wrong uses of speculation, either in our 
statutes or in our moral judgments, according to the 
form of the transaction. We must go deeper, in order 

[50] 



THE ETHICS OF TRADE 

to see whether a man is presumably meeting an actual 
want of the public or simply satisfying the craving of 
his own instinct for gambling. 

The first essential in right speculation is that a man 
must be really able to make good his guarantees as to 
the future. In other words, he must be risking his own 
money. If he is making contracts for future delivery 
on the basis of other people's money, — whether through 
actual borrowings or through inflated credit, — this 
means that the profits, if there are profits, will go to him, 
and the losses, if there are losses, will fall on somebody 
else. This is not trade; it is gambling with loaded 
dice. If we can insist that the man shall have capital 
to make good his guarantees, we shall pave the way 
for a process of natural selection by which the skilful 
man, who can meet the needs of the public, will come 
to the front; while the unskilful man, from the very 
fact that he loses his own money, will retire from the 
business as unprofitable. 

There are already many lines of industry and com- 
merce in which large commission houses and brokerage 
firms have grown up, whose business meets this test 

[51] 



STANDARDS OF PUBLIC MORALITY 

to the fullest degree; bouses with adequate capital, 
whose profit represents the profit due to accumulated 
/experience. This is clearly the right and serviceable 
sort of speculation. In such industries the firms that 

practise this kind of speculation are honored; while 

the gamblers whose transactions are .similar in form, 
l>nt different in intelligence and solidity of purpose, 

are discredited. It only remains to extend this differ- 
entiation over a wider field — to assign the proper 
meed of honor to the moderate fortunes that have 
been made by forecasting public needs in produce and 
securities, and the proper meed of dishonor to those 
larger and more dazzling winnings which have been 
made by borrowing the necessary capital to execute 
some coup which conduces more to a man's fortune 
than to his reputation for honorable dealing. It is 
because the public judges transactions by their form 
rather than by their underlying relation to the needs of 
the market that reputable houses in any line of business 

allow their names to he connected with transactions of 
this kind; and it is because reputable houses thus lend 
their names to them that disreputable ones can profit 



THE ETHICS OF TRADE 

by the weakness and ignorance of their customers. 
It is the fundamental purpose of the transaction, not its 
outward form, that makes it good or bad; that deter- 
mines whether the speculator is performing for the public 
the service of ensuring it against fluctuations in supply, 
or is taking advantage of the public desire to get rich 
quickly and pandering to its worst commercial appe- 
tites. 

There is another set of objections urged against 
competition and the system of trade ethics based upon 
it. Competition, in the opinion of many, is but another 
name for the struggle for existence. To make this a 
basis of ethics is a mere glorification of force ; — 

" The good old rule, the simple plan 
That they should take who have the power 
And they should keep who can." 

It may indeed work a sort of rough justice where the 
two parties to a transaction are on equal terms. When 
buyer and seller both have money, the market price 
may be fair to both; but when a capitalist who has 
money buys labor from a man who has none, the result 
cannot possibly be fair to the latter. The capitalist 

[53] 



STANDARDS OF PUBLIC MORALITY 

can wait. The laborer must work on the capitalist's 
terms, or starve. Under these circumstances the op- 
ponents of competition say that the modern competitive 
system necessarily involves a gradual accumulation of 
capital in the hands of the moneyed class. It may 
produce satisfactory results for the consumers; but they 
hold that, as between different classes of producers, its 
effects are in the highest degree unsatisfactory and un- 
just. They are willing to credit competition with the 
improved business methods and improved industrial 
efficiency of modern times ; but they think that these are 
purchased at the expense of the very lifeblood of the 
people. They hold that with society constituted as it 
is, the fierce struggle for existence between different 
workmen has produced so much evil to the laborers 
that it balances or outweighs the good which it has 
accomplished in other directions; and that any man 
who looks with complacency on the ethics of the mod- 
ern competitive system must shut his eyes to this enor- 
mous and widespread wrong. 

The relative amount of good and evil existing under 
the competitive system is obviously a question of fact. 

[ 54 ] 



THE ETHICS OF TRADE 

For my own part, I hold that the good greatly out- 
weighs the evil. It seems to me undeniable that all 
through the nineteenth century the workmen as a class 
have been making great progress ; and that the general 
standard of a workman's w r ages in each successive gen- 
eration enables him to buy more things and better things 
than his father did. During my work as a labor com- 
missioner and as a journalist, I was repeatedly im- 
pressed by the fact that the worst cases of destitution, 
whether in city or country, were where practices that 
were typical in the eighteenth century had survived in 
the nineteenth. The abuses of child labor which are 
laid to the account of modern competition appear to 
have existed in worse form before the factory system 
was ever thought of. The little children were worked 
like slaves in their homes from morning till night. 
It was when these abuses came out into the light that 
they began to be stopped. The sweating system, the 
tenement-house cigar system, and the other parts of 
our industrial system which shock us most, are rem- 
nants of the old methods, not characteristics of the 
new ones. The modern system has evils enough of its 

[55] 



STANDARDS OF PUBLIC MORALITY 

own to answer for; but Dot, I think, these particular 

one- with which it is perhaps mosl frequently charged. 

During the period to which I refer my attention was 

Called to one phase of the competitive system which 

ems particularly dangerous. I refer to those cases 

where unlettered immigrants with a low standard of 

living take the bread out of the mouths of men of 
higher grade, intellectually and morally, who require 
a correspondingly higher standard of living to sustain 
them. Yet even in this extreme case I am convinced 

thai the competition produces a net balance of economic 

advantage; that when you say to the laborer who lias 
previously occupied the ground, " Rise or die," the num- 
ber of people who are able to take advantage of being 
relieved from the drudgery of the lowest grade of labor 
to rise is indefinitely greater than the number of those 
who. being unable to accept the new conditions, are 
crowded out of the means of self-support. Far be it 
from me to say one word which might seem to argue 

indifference to the hardship of those who could not 

rise; and yet the system as a whole 1 must be judged by 

it- effed on the large number who are benefited, often 

[56] 



THE ETHICS OF TRADE 

in spite of themselves, rather than on the comparatively 
small number who would not or could not enjoy its 
benefits. The Irishman of 1830 forced the American 
up, and not out. The Italian of 1880 forced the Irish- 
man up, and not out. The Italian, in turn, if he re- 
main here for permanent citizenship, is being forced up 
to an eminence of which his ancestors never dreamed 
by the successive crowds of immigrants from countries 
farther east. There are objections, and serious ones, 
to unrestricted immigration; but they are connected 
with the difficulty of assimilating as members of our 
body politic people whose traditions of civil liberty and 
moral responsibility are different from our own, and 
whose language forms a barrier against their rapid 
reception of our ideals, rather than with any evil 
economic effect which these men are likely to have 
upon the production and distribution of the wealth of 
this country. 

We are told that competition between labor and capi- 
tal is essentially and necessarily unfair. This charge 
sounds plausible enough; but it really rests upon a 
misconception of the nature of competition. There is 

[57] 



STANDARDS OF PUBLIC MORALITY 

do competition between labor and capital There is 
competition between capitalists for the services of the 

laborers, and between laborers for the opportunity to 
work for the capitalist. It may well be that the struggle 
on the one side is sometimes more intense than on the 
other. It may happen that there are SO many workmen 
in a given place that they will push wages down to 
the starvation point, or that there is so much capital 
in a certain place that it will push profits down to zero. 
But the important thing to notice is that where com- 
petition exists at all, the abundance of the capital forms 
a source of strength to the laborer rather than of weak- 
ness, because it means that there is more opportunity for 
his efficient labor and more people who can afford to 
pay a good price for his services. If all the capital in a 
given line is monopolized under a given organization, 
the laborer may not get the benefit of this state of 
things. But there have been very few Industrie- in 
the world where all the opportunities for work or nearly 
all of them have been thus monopolized. Until that 
time the competitive system makes every increase in 
the amount and efficiency of capital a means of gain to 

[58] 



THE ETHICS OF TRADE 

the laborer instead of loss; and the trades-unionist 
who attempts to accelerate this process of organization 
of capital by insistence on the system of collective bar- 
gaining, has been transferring the industrial conflict 
from a field where the strength of different capitalists 
helps the laborer, because the capitalists are pitted 
against one another in bidding for his services, to one 
where their strength hurts him because it enables them 
to endure longer than he can. Admitting the beneficent 
effects of trades-unions in some cases, and the serious 
provocation given by capitalists and their agents to the 
formation of such unions in other cases, we must not 
shut our eyes to the fact that in America, during all 
that part of the nineteenth century where the labor 
market was actively competitive, the results to the work- 
men in wages, comfort, and progress were decidedly 
better than in England, where organized labor dealt 
with organized capital. 

For competition is a very much more beneficent 
thing than its critics are willing to admit; and the 
deeper we look into its real workings, the more we see 
the folly of the attempts to do without it. Competition 

[59] 



STANDARDS OF PUBLIC MORALITY 

is a totally different thing from the Darwinian struggle 
for existence. Competitive ethics is nol a mere glori- 
fication of force. It has a moral element which it^ 
opponents overlook. It is a fight for existence organized 

in such a way that the outside world is benefited by 
it, instead of being injured by it. When two snakes or 
two tigers are struggling as to which shall get the same 
bird, the probability of an advantageous outcome for 
the bird is very slight. When two bosses are struggling 
as to which -hall gel the same workman, the probability 
of an advantageous outcome for the workman is very 
large. From the standpoint of the parties who compete 
with one another there is in each instance a content; 
but from the standpoint of the other party the intensity 
of the contest means an injury in one case and a benefit 
in the other. The more snakes there are, the worse for 
the bird; but the more bosses there are, the better for 
the workman. Competition is what its name implies 
— a simultaneous petition or offering of services under 
which the man who offers the best service is chosen. 
It is an attempt to base survival on ethical efficiency 
rather than on physical efficiency. 

[60] 



THE ETHICS OF TRADE 

Not its acceptance of the ethics of competition, but 
its attempt to apply those ethics to cases where com- 
petition does not exist, forms the basis of the really 
serious charges which the moralist can bring against 
the modern business world. What some of these cases 
are and what ought to be done with them, will be con- 
sidered in the next lecture. 

To sum up. A just price, according to the traditional 
and generally accepted view, is one which conforms as 
closely as possible to the cost of producing the com- 
modity; and of that cost labor is the largest element. 
But a law or a public sentiment which compelled the 
trader to base his price on cost, and condemned as 
unjust all exceptional profits, was found to defeat its 
own end. It was better in time of scarcity to allow 
the temporary high prices to serve as a stimulus for 
increased supply. Even if that increased supply was 
brought about by the skill of speculators, it was well 
to leave speculators their profit, as long as they really 
undertook to meet the need and prevent the scarcity. 
We are justified in approving as on the whole beneficent 
the theory that the best price for society is that which is 

[61] 



STANDARDS OF PUBLH MORALITY 

made under open competition of buyer witb buyer on 
the one hand, of seller with Beller on the other band; 
and that where competition really exists the ethi 

modern trade are SOUnd. 



' 



CHAPTER III 



ETHICS OF CORPORATE MANAGEMENT 



CHAPTER III 

ETHICS OF CORPORATE MANAGEMENT 

WHEN I go to a responsible store to make a pur- 
chase, I have every reason to believe that the 
price charged will be a fair one. I may not 
like the goods ; I may not feel that I can afford the price ; 
but if I like the goods and can afford the price, I assume 
that I am not being cheated. The competition of 
different establishments makes the general scale of 
charges just ; and public sentiment in favor of a one- 
price system assures me that I shall have the benefit of 
this general scale of charges in my own particular case. 
If I go to a bank to borrow money on good security, 
I have the same feeling. The competition of respon- 
sible borrowers on the one hand, and responsible lenders 
on the other, makes a fair interest rate at which the 
number of those who can give good security for the 
management of other people's capital absorbs the offer- 
f [65] 



STANDARDS OF PUBLIC MORALITY 

ings erf those who are willing to lend their money. Or, 
if I try to sell my services in any of the recognized lines 
of industry, I have confidence thai both the self-interest 
and self-resped of the man with whom I am dealing will 
lead him to offer me a fair market rate and that the 
scale of wages or fees thus created will be more advan- 
tageous on the whole than anything which could be 
devised by law. 

Of course there are numerous exceptions. The man 
or woman who hires a cab is by no means certain that 
the self-respect of the cabman will lead him to believe 
in a one-price system; and while the competition of 
different cabs with one another may make a fair enough 
average rate of compensation, there is great probability 
that extortion will be practised in individual instances. 
Therefore the law steps in to regulate the price of cabs. 
The man or woman who has occasion to borrow of 
a pawnbroker has no assurance that the pawnbroker 
will believe in a one-price system or give the benefit 
of a market rate of interest. Hence there i- a good 
deal of well-founded demand for usury laws. The 
only reason why we do not have them i^ because the 

{66] 



ETHICS OF CORPORATE MANAGEMENT 

advocates of such laws generally object to interest in 
itself, rather than to extortionate variations from market 
rates of interest. 

But the most important cases of departure from the 
one-price system, and of apparent need of some further 
protection than is given by competition, do not come in 
connection with cabs or pawnbrokers or other minor 
industries of any kind. They come in connection with 
the dealings of large corporations which obtain a mo- 
nopoly of the market for some line of goods or services. 

In his charmingly practical book on Politics, 
Aristotle tells two stories which are of perennial interest 
to the student of industrial combination. In the first 
of these he relates how Thales of Miletus was a great 
philosopher, but was reproached by his neighbors 
because he was not as rich as they were. By his ac- 
quaintance with astronomy, Thales foresaw that there 
would be large crops of olives; and he purchased all 
the olive presses of Miletus, depositing a very small 
sum in each case so as to make the transaction complete. 
When the olives w T ere ripe, behold ! there was no one 
but Thales to rent men the presses whereby they 

[67] 



STANDARDS OF PUBLIC MORALITY 

might make their oil; and Thales, who was thus able 
to charge what price lie pleased, realized an enormous 

sum. lie did this, says Aristotle, not because he eared 
for the money, hut to show hi- neighbors that a philoso- 
pher can he richer than anybody else it" he want- to, 
and it' he i- not.it -imply proves that he has more worthy 
objects of contemplation. 

There was a man in Syracuse, Aristotle goes on to 
say, in the days of Dionysius the Tyrant, who bought 
all the iron in Sicily on so narrow a margin that without 
raising the price very much he was able to make tw^ice the 
amount of his total investment in a short time. When 
Dionysius the Tyrant heard of this, he was pleased with 
the ingenuity <>f the man : and he told him that he might 
keep hi- money, but that he had better leave Syracuse. 

These stories -how plainly enough that monopolies 
are no new thing; that more than two thousand years 
ago there wa- a Standard Oil Company (^ A-ia Minor 
and a United States Steel Corporation of Sicily; and 
that the President of the United States is by no means 
the first monarch who has addressed himself somewhat 
aggressively to the problem of trust regulation. But 

[68] 



ETHICS OF CORPORATE MANAGEMENT 

in ancient times these monopolies of producers or mer- 
chants were an exception ; now they are becoming the 
general rule. 

The development of the power-loom and the spin- 
ning-machine in the middle of the eighteenth century, 
followed shortly by that of the steam-engine, substi- 
tuted a system of centralized industry, where a number 
of people work together, for the scattered industry of 
the older times, where people worked separately. The 
invention of the steamship and the railroad enabled the 
large factories of modern times to send their goods all 
overthe world, and allowed the establishments to increase 
in size as long as any economy in production was to 
be gained by such an increase. The capital required 
for these large industries was far beyond the power of 
any one man or any small group of partners to furnish. 
The modern industrial corporation, with free transfer 
of stock, limited liability of the shareholders, and 
representative government through a board of directors, 
was developed as a means of meeting this need for 
capital. Men who could take no direct part in the 
management of an industrial enterprise, and whose 

[69] 



STANDARDS OP PUBLIC MORAL] TV 

capita! was only a very small traction of what \\ .i< 

needed for the purpose, could, under the system of 
limited liability, safely associate themselves with t 
hundred or a thousand others to take the chant 
profit which concentration of capital afforded. 
These industrial units soon became so large that a 

single one of them Was able to supply the whole market. 
Competition was done away with, and monopoly took 
it- place. This effect was first felt in the case of rail- 
road transportation. Von could not generally have 
the choice between two independent lines of railroad, 
because business which would furnish a profit to one 
line was generally quite inadequate to support a second. 
Nor could yon hope for the competition of different 
owners of locomotives and cars on the same line of 
track. because of the opportunities for accident and loss 
t<> which such a system was exposed. In England, 
indeed, they were impressed with the analogy of a rail- 
road to a turnpike or canal, and for nearly half a cen- 
tury after the establishment of railroads they made all 
their laws on the supposition that cars and locomotives 
would be owned by different people. But the failure 

[70] 



ETHICS OF CORPORATE MANAGEMENT 

of these laws, when bo persistently enacted and ba' 
by a conservatism of feeling 90 strong as that of the 
English nation, is the best proof of th<- impracticability 
of the scheme. By 18.30 it became pretty clear that 1 

railroads had a monopoly of their local business. By 
1870 the consequences of this monopoly had become 
quite clearly apparent. 

These consequences were in some respects good and 
in some respects bad. The railroad managers were 
quick to introduce improvements and to effect economy 
of organization. These improvements allowed them 
to make rates very low on long-distance business in 
general, and particularly on business which came into 
competition with other railroads or with water-routes. 
But the extreme lowness of these through rates only 
emphasized the glaring inequality between the treat- 
ment of the through or competitive business, and the 
local business of which the railroad had a monopoly. 
On the old turnpike the cost of transportation had been 
high, but the shipper could rely upon the price as fair. 
There was always enough competition between different 
carriers to prevent them from making extortionate 

[71] 



STANDARDS OF PUBLIC MORALITY 

profits on any one shipment. On the railroad which 
took the place of the turnpike the cost of transporta- 
tion Was very much lower, but there WBS Q0 ass uianee 

whatever <rf fairness. The local rates were sometimes 
kept two or three times as high as the through ones; 
and the shipper had to see car loads of freight hauled 
to market past his house from more distant points at 
twenty-five dollars a car load, when he himself was pay- 
ing lift}* dollars a car load for hut a part of the same 
haulage. Nor was this the worst. Arbitrary differ- 
ences between places were had enough; hut there was 
a similar discrimination between different persons in 
the same place. The local freight agent was a sort of 
almoner of the corporation. The man who gained his 
ear, whether by honest means or not, got a low rate. 
The man who failed to get the ear of the freight agent 
had to pay a much higher rate for the same service. 

In this country things were at their worst in the years 
immediately following the Civil War. While we had 
a one-price system in the trade of the country, hoth 
wholesale and retail, and in its banking, and to a large 
degree in its labor market, the who]'; system of Ameri- 

[72] 



ETHICS OF CORPORATE MANAGEMENT 

can railroad rates was run on principles which a de- 
cently conducted store would have scorned to admit 
into its management. Our industrial methods had 
changed too fast for our ethics to keep pace with them. 
In the old-fashioned lines of business people were al- 
lowed to charge what prices they pleased, because com- 
petition kept their power of making mistakes within 
narrow limits. In the local railroad freight business 
competition was done away with, and the managers did 
not see the necessity of substituting any other legal or 
moral restraint in its stead. In fact, they asserted a con- 
stitutional right to be free of all other legal or moral re- 
straints. They regarded the liberty to serve the public 
in their own way, which had been allowed them under 
the competitive system, as carrying with it a right to 
hurt the public in their own way when the protection 
of competition was done away with. Instead of seeing 
that the constitutional rights for the protection of prop- 
erty had grown up because property was wisely used, 
they asserted that it was none of the public's business 
how they used the property, as long as they kept 

within the letter of the Constitution. 

[73] 



STANDARDS OF PUBLIC MORALITY 

Of course this arbitrary exercise of power provoked 
a reaction. The state legislatures of the Mississippi 
Valley passed the various Granger laws which were 

placed on their statute books from 1870 to is?.}. These 
laws represented an attempt to reduce rates as unintel- 
ligent and crude as had been the attempts of the rail- 
road agents to maintain rates. In the conflict of con- 
stitutional authority, the court- on the whole took the 
side of tile legislatures more than they did that of the 
railroads; and the ill-judged laws regulating railroad 
charges, which could not he repealed until several 
year- too late, were an important factor in increasing 
the commercial distress that followed the crisis of 1873. 
Just when things were at their worst a really great 
man appeared on the scene of action in diaries Francis 
Adams of the Massachusetts Railroad Commission. 
He promulgated an idea, essentially ethical in it< charac- 
ter, which not only was of great service at the time, l>nt 
has been the really vital force in all good scheme- of 
corporate regulation ever since. It is hardly too much 
to say that all our plans for dealing with corporate 
monopoly have been successful according to the extent 

[74] 



ETHICS OF CORPORATE MANAGEMENT 

to which they conformed to Mr. Adams's idea, and that 
their ill success in various cases has been the result of 
their departure from it. Mr. Adams's central principle 
was this. In the management of a railroad the tempo- 
rary interests of the road and of its various shippers 
are often divergent ; but the permanent interests of the 
railroad and of the various shippers come very much 
closer together than the temporary ones, and can almost 
be said to coincide. A railroad which is managed to 
make the most profit for the moment will try to make 
very low rates on through business that might other- 
wise go to another line, and will squeeze to the utmost 
the local shippers who have no such refuge. But if a 
manager looks five years or ten years ahead, he will 
see that such a policy kills the local business, which after 
all must furnish the road's best custom, and stimulates 
a kind of competitive business which can and will go 
somewhere else when the slightest opportunity is given. 
The manager who looks to the future, therefore, 
instead of to the present, will put the local business 
on the same level as the through business; and if he 

makes any difference at all in the charge, it will be due 

[75] 



STANDARDS OF PUBLIC MORALITY 

to a slightly superior economy of handling and 

regular consignments for long distances, as compared 
with the small and irregular consignments of inter- 
mediate points. The agent who -imply want- to 
the most money that he can for the moment will see an 
apparent advantage in making a special bargain with 
cadi customer. The agent who takes a long look 
ahead will do just what the storekeeper does who takes 
a long look ahead. He will see that the right customer 
to develop is the self-respecting man who is content 
with the same treatment as other customers; who is 
too proud for begging and too honest for bribery. 

I cannot go into all the details of the application of 
this theory. Suffice it to say that during the compara- 
tively short time when he was at the head of the 
Massachusetts Commission, Mr. Adams did, in fact, 
persuade the railroad men of his state, and of a great 
many other states, to take this view of the matter: that 
by his recommendation, made without any authority 
except the authority of common sense, he permanently 
removed more abuses in railroad management than all 
the various -talc statutes put together; and that the 

[76] 



ETHICS OF CORPORATE MANAGEMENT 

judicial decisions of the years from 1875 to 1885, when 
Mr. Adams's influence was dominant, show a con- 
stantly increased understanding, not only of the prin- 
ciples of railroad economy, but of the principles which 
make for the permanent public welfare of shippers and 
investors alike. 

I have spoken of Mr. Adams's influence as an ethi- 
cal one. The Railroad Commission of Massachusetts, 
under the original bill which established it, had practi- 
cally no powers except the power to report. It was for 
this reason regarded by many as likely to be a totally 
ineffective body. This absence of specific powers was 
just what Mr. Adams welcomed. It threw the Com- 
mission back on the power of common sense — which 
does not seem as strong as statutory rights to prosecute 
people and put them in prison, but which, in the hands 
of a man who really possesses it, is actually very much 
stronger. And when commissions of more recent 
years, disregarding the experience of Mr. Adams, have 
besought over and over again for an increase of their 
pow r er to make rates, and their power to prosecute 
offenders, and their power to keep the courts from 

[77] 



STANDARDS OF PUBLIC MORALITY 

reviewing their acts, I am reminded of the minister in 

the country church, who said, "O Lord, We pray for 
power; () Lord, we pray for power;" until an old 
deacon, unable to contain himself, interrupted, "'Taint 
power you lack, young man; it's idee- J"' 

In a complex matter like this we are governed by 
public opinion. Anything that makes it necessary for 
a man to get public opinion behind a measure of ad- 
ministration or regulation prevents him from trying 
unsound experiment-, and assures him that the things 
that he carries through will he successful in fact and 
not merely in name. Good sense is needed to create 
acquiescence on the part of the court-, and to prevent 
widespread evasion of statutes and ordinances by the 
business men of the community as a body. Any measure 
which seems to dispense with the necessity of its exercise 
i- pretty sure to end in disaster. 

I have gone into the detail of Mr. Adams's work for 
the sake of this ethical lesson which it inculcate-. 

We have passed beyond the conditions of Mr. Adams's 

time. National regulation has taken the place of 
-tate regulation of railroad-. Other form- of corporate 

[78] 



ETHICS OF CORPORATE MANAGEMENT 

activity have organized into monopolies perhaps more 
widespread and powerful than any railroad monopoly 
ever was. The relations of corporations to their em- 
ployees, and the mutual duties of organizations of capi- 
tal and labor toward the public in making continuous 
public service possible, have become vastly more com- 
plex than they were thirty years ago. But the essential 
fact still remains that the problem can be settled only 
by the exercise of common sense and a certain amount 
of unselfishness. Any law which seeks to render these 
qualities unnecessary or superfluous is foredoomed to 
failure. Any citizen who lets these qualities fall into 
abeyance falls short of a proper conception of public 
duty. The larger his position of influence in the in- 
dustrial world, the greater is the responsibility upon him 
to bring these qualities into use in the conduct of cor- 
porate business. 

The president of a large corporation is in a place of 
public trust. In an obvious sense he is a trustee for 
the stockholders and creditors of his corporation. In 
a less obvious but equally important sense he is a trustee 
on behalf of the public. 

[79] 



STANDARDS OF PUBLIC MORALITY 

In regard to the first of these points, the community 
has made substantia] and gratifying progress toward 
proper moral standards and their enforcement. It will 
perhaps create surprise thai I say this so unreservedly, 
when we have the results of the insurance scandals 

freshly in mind. But bad as those things were, they 
were not nearly SO bad as many things that happened 
a generation earlier; and when the insurance scandals 
became known, they created an outburst of public 
feeling of a very different kind from anything which 
would have developed forty years ago. The spontaneous 
and overwhelming character of this outburst shows a 
great moral advance. In the year 1870 it was the com- 
monest thing in the world for the president of a large 
corporation to use his position as a means of enriching 
himself and his friends at the expense of the stock- 
holder- in general; and it might almost be added that 
it was the rarest thing in the world for anybody to ob- 
ject. The fact that Cornelius Yanderbilt admitted his 
stockholders to the benefit of profitable kk deals/' instead 
of taking the whole for himself and his friends, was a 

sufficient departure from the usage of the time to excite 

[80] 



ETHICS OF CORPORATE MANAGEMENT 

universal remark. The worst things which were done 
in our insurance companies represent a pious regard for 
the law and a scrupulous observance of the principles 
of morality, as compared with some of the transactions 
in Erie in the early seventies. Ten years later things 
had improved. It was no longer considered proper for 
a president to wreck his company in order to enrich 
himself. Yet even in this decade it was held that minori- 
ties of stockholders had no rights which majorities were 
bound to respect; and while the public did not justify 
the president in getting rich at the expense of his stock- 
holders, it saw no harm if he used his inside informa- 
tion to get rich at the expense of anybody and every- 
body else. It is greatly to the credit of some of our best 
railroad men that in the last decade of the nineteenth 
century we rose above this state of things. The ex- 
ample of a recent president of the Lake Shore Railroad, 
who died a relatively poor man when the stock of his 
corporation stood higher than that of almost any other 
railroad in the country, is a thing which deserves to be 
remembered — and which has been. 

Banks and railroads were the two lines of business 

g [81] 



STANDARDS OF PUBLIC MORALITY 

where corporate scandals first developed on a large 
scale. They are now the two lines of business where 
standards of corporate honor, beyond what the law 
could enforce, have become pretty well established. 
This i- no mere coincidence. Corporate powers gave 
opportunities for abuse which did not exist before. 
Where these power- were greatest, these abuses developed 
first and made the earliest public scandals. It was 
here that the business men themselves felt the need of 
remedies deeper reaching than those which the law 
could give. Combinations of merchants or manufac- 
turers or of financiers outside the regular lines of bank- 
ing were a later thing, and therefore we are only at this 
moment correcting the evils which are incident to their 
conduct. 

It takes a long time for a man to learn to transfer a 
principle of morality which he fully recognizes in one 
held to another field of slightly different location and 
character, particularly if the application of strict moral- 
ity in the new field is going to hurt his personal interest. 
I remember a story of a country court in a warranty 
case which furnishes an instance in point. One man 

[82] 



ETHICS OF CORPORATE MANAGEMENT 

had sold another a cow, and had represented that cow 
as possessing certain good qualities — adding, how- 
ever, that he did not warrant her. The cow proved 
not to possess the qualities alleged, and the buyer sought 
to recover the purchase-money. As there was no dis- 
pute about the facts, the plaintiff's attorney thought 
that he had an easy case; for it is a well-established 
principle of law that a disclaimer of warranty in such a 
sale does not protect the transaction from the taint of 
fraud, if the matters in question were ones which the 
seller really could know and the buyer could not. He 
showed a sufficient number of legal precedents to il- 
lustrate this principle, but was somewhat dumbfounded 
when the opposing lawyer rose and said : u May it please 
the court, every one of the cases cited by my learned 
brother is a horse case. I defy him to produce one 
relating to horned cattle." The court was impressed 
with this fact, and instructed the jury to the effect that 
it had been established from time immemorial that a 
disclaimer of warranty was invalid with regard to a 
horse, but that the case of a cow was something totally 

different. We witnessed a somewhat similar condi- 

[83] 



STANDARDS OF PUBLIC MORALITY 

tion in recent years, when men who would have recog- 
nized that it was wrong to gel rich at the expense of a 
stockholder, who had clear and definite rights to divi- 
dends that were earned, were perfectly willing to use 
all kinds of means to enrich themselves at the expense 
of the policy holders, whose rights were vague and in- 
definite. The lesson of last year was a terrible one; 
hut I believe that it has been thoroughly learned. 
The business community of to-day recognizes that the 
president and directors of a corporation have a fiduciary 
relation both to their stockholders and to their creditors ; 
that any man who disregards this relation is guilty of 
breach of trust, just as much as he would be if he used 
his position as guardian of an orphan to enrich himself 
at the expense of his ward. If any man does not see 
this, the business community despises his intellect. 
If lie does see this and acts in disregard of it, the busi- 
n< 5S community despises his character. 

Unfortunately the obligation of the managers of our 
corporations to the public is not yet as clearly H 
nized as their obligation to the stockholders. Some 
of those 4 who are most scrupulous about doing all that 

[84] 



ETHICS OF CORPORATE MANAGEMENT 

they can for the stockholders make this an excuse for 
doing as little as they can for the public in general, 
and disclaim indignantly the existence of any wider 
tru>t or any outside duty which should interfere with 
the performance of their primary trust to the last 
penny. There is many a man who in the conduct of 
his own life, and even of his own personal business, is 
scrupulously regardful of public opinion, but who, as 
the president of a corporation, disregards that opinion 
rather ostentatiously. Personally he is sensitive to 
public condemnation; but as a trustee he honestly 
believes that he has no right to indulge any such sen- 
sitiveness. He is unselfish in the one case, and selfish 
in the other. I believe that this results from an ex- 
tremely shortsighted view of the matter; and that the 
conscientious fulfilment of wider obligations, which he 
mes as a matter of course when his own money is 
at -take, is at once wise policy and sound morality 
when he is acting as trustee for the money and in- 
terests of others. 

Even from the narrowest standpoint of pecuniary 
interest, the duty of the corporate president to the 

[85] 



STANDARDS OF PUBLIC MORALITY 

investors demands that he should by his life and his 
language strive to diminish the danger of legal spolia- 
tion which threatens property rights in general and 
the rights of corporate property in particular. This 
obligation is partly recognized, and partly not. Our 
leaders of industry, as a rule, do not spend great sums 
on ostentatious luxury, and do spend great sums on 
objects of public benefit. Both of these facts are in- 
valuable conservative forces. On the other hand, too 
many of them insist publicly on an extreme view of 
their legal rights and claims, which cannot help irri- 
tating their opponents, and which does a great deal 
more harm to the interests of property than most people 
think. It w r as the arrogance of the freight agents, quite 
as much as the mistakes in their schedule of charges, 
that precipitated the Granger agitation. They de- 
fiantly refused to recognize the shipper's point of view. 
Every such defiance by the head of a large corporation 
makes more converts to radicalism and socialism than 
the speaker ever dreams. If a man intends to stand on 
liis legal rights, it is generally wise for him to keep as 
quiet as the circumstances admit. The cases are few 

[8G] 



ETHICS OF CORPORATE MANAGEMENT 

and far between where a loud statement in advance 
that he is going to stand on his legal rights, and that 
those rights in his judgment are consonant with the 
laws of God, produces anything but an adverse effect 
on his interests and on the interests of those whom he 
represents. It is not for the profit of the year's balance- 
sheet that the corporate president should regard him- 
self as responsible, but for the profit in the long run; 
and that profit in the long run is identified with the 
maintenance of a conservative spirit and the avoidance 
of unnecessary conflicts between those who have and 
those who have not. 

The duty of the corporate president to the investors 
also demands that he use all wise means for the main- 
tenance of continuous public service. The more com- 
plete the monopoly which he has, and the more vital 
the public necessity which he provides, the greater is 
the importance of this aspect of his trust for the per- 
manence of the interests which he represents. For if 
the employer is indifferent to the public need in this 
regard, the employees will be still more indifferent. If 
he tries to make public necessity a means to reenforce 

[87] 



STANDARDS OF PUBLIC MORALITY 

his demands, they will make that public necessity a 
means to reenforce their demands; and in this contest 
the employees will have every advantage on their side. 
Each conflict of this kind will increase the demand 
for public regulation of corporate affairs, even if the 
interests of the investors suffer thereby; and it may 
reach a point where many lines of business will be taken 
out of the hands of private corporations and into the 
hands of the government. 

In the old days, when the public was served by a 
number of independent establishments, a strike was a 
grave matter for the establishment where it existed and 
a comparatively small thing for anybody else. The pub- 
lie got its goods from some other quarter. The slight 
shortage in the supply might raise the prices a little, 
but it did not produce a famine. The community as 
a whole could wait complacently for the fight to be 
settled. Tf, however, the company has a monopoly, 
the conditions are reversed. The strike, if protracted, 
causes great inconvenience and generally considerable 
suffering to the public, while the effect on the finances 
of the corporation is often comparatively slight. Indeed, 

[88] 



ETHICS OF CORPORATE MANAGEMENT 

it has become a proverb that strikes are not as a rule 
good reasons for sale of the securities of the companies 
affected. I am afraid that this fact makes the presidents 
of our corporations, especially those who hold a narrow 
view of their duties, more careless than they otherwise 
would be about men whom they choose for positions 
of superintendence, and about the policy which they 
adopt in early stages of labor disputes. But it is upon 
care in these particulars, rather than upon any machin- 
ery for compulsory arbitration, that we must rely for 
the prevention of strikes. I suppose that sometime 
we shall devise systems of arbitration which will avoid 
a large number of our industrial quarrels ; but those 
that I have actually seen in operation do not appear 
very promising. We are told that compulsory arbitra- 
tion has been made to work in Xew Zealand ; but some 
of the official information which we get from Xew 
Zealand has been so totally discredited that we must be 
a little cautious about accepting any of the testimony 
which is transmitted to us. Xor do I believe very 
greatly in the efficiency of profit-sharing systems as a 
general means of preventing labor troubles. Some- 

[89] 



STANDARDS ov PUBLIC MORALITY 

times they work well; oftener they do not. Plans for 
attaching the laborers to the corporate service by pen- 
sion funds, by the distribution of stock, and other an ans 
of this kind, arc perhaps ratlin* more promising. 
Yet even these are limited in their applicability, and 
sometimes cause more unrest than they prevent. 

For the present, it is Dot to any machinery that we 
must look for the solution of these difficulties. It is 
to a wider sense of responsibility on the part of di- 
rectors and general officers. The man who selects his 
subordinates solely for their fitness in making the 
results of the year's accounts look best, and instructs 
them to work for these results at the sacrifice of all 
other interests, encourages the employees to work for 
themselves in defiance of the needs either of the cor- 
poration or of the public, and does more than almost 
any professional agitator to foster the spirit which 
makes labor organizations unreasonable in their de- 
mands and defiant in their attitude. For the laborers, 
like some o\' the rest of us, are a good deal more 
affected by feeling than by reason; a good ileal more 

influenced by examples than by syllogisms. 

[<)0j 



ETHICS OF CORPORATE MANAGEMENT 

When I was connected with the Railroad Gazette, 
we had occasion to discuss a strike on the part of one 
of the best of the labor unions, in which, contrary to 
the usual practice of that organization, the demands 
were quite unreasonable. There was something puz- 
zling in the whole situation, which I could not account 
for. A close observer who, though he was on the side 
of the corporation, had sense enough to look at the 
facts dispassionately, said, " Do you know Blank ? " 
naming a man high in the operating department of the 
road concerned. I said that I did. " Blank," he said, 
"is an honest man. He is, according to all his lights, 
an honorable man. And yet if Blank were placed 
over me, I would strike on any pretext, good or bad, 
just to show how I hated his ways of doing business. 
This strike is, of course, an unjustifiable one. For the 
sake of all concerned it should be stopped as soon as 
possible, and your paper should say so. But when the 
strike is over, sail into the road with all your might for 
employing a man like Blank in a position precisely the 
opposite of anything for which Providence designed 
him." It soon became evident that this was a true 

[91] 



STANDARDS OF PUBLIC MORALITY 

account of the origin of the strike. The company 
saw the situation and transferred the man, on its own 
account, to another post for which lie was more fitted. 

Workmen are accessible to examples of loyalty, as 
well as examples of selfishness. One of our very large 
manufacturing concerns in western Pennsylvania a 
few years ago made a change in its operating head. 
Not many months after the change I had the oppor- 
tunity to inquire of a foreman how things were working 
under the new management. " Sir," was the reply, 
" there isn't a man in the works but what would go 
straight through hell with the new boss if he wanted it." 
I told the " new boss ,? the story; and all he said was, 
" I guess they know that I'd do the same for them." 
That was the voice of a man — an exceptional man; 
but what he really accomplished represents a kind of 
result which all of us will do well to keep in view. 

In the great railroad strikes of 1ST?, when the 
Brotherhood of Locomotive Engineers, — at that time 
a far less conservatively managed organization than it 
lias since become, — intoxicated with its successes in 
the South, ordered a general tie-up of New England, 

[ M ] 



ETHICS OF CORPORATE MANAGEMENT 

the men of the New York & New England Railroad 
met the order with a flat refusal. They had no other 
reason, and they gave no other reason, than their 
loyalty to a man who was at that time a superintendent 
of no particular reputation or influence outside of his 
own immediate sphere of duty, — Charles P. Clark, 
who afterward became president of the road. That 
one man by his personality not only prevented a general 
strike throughout New England, but by that act re- 
stored the balance of industrial force in the United 
States at a time when it was more seriously threatened 
than it ever has been before or since. 

A few years later, when a strike on the Union Pacific 
Railroad was scheduled by the Knights of Labor, the 
president of that road prevented the strike by the 
simple expedient of so arranging matters that the re- 
sponsibility for the interruption of public service w r ould 
at each stage of the proceedings be clearly put upon the 
labor leaders themselves. If the company had been 
simply claiming the right to serve itself, they would have 
claimed an equal right to serve themselves, and might 
very possibly have had the sympathy of the public 

[93] 



STANDARDS OF PUBLIC MORALITY 

behind them. Bui when matters were so arranged in 
advance that the responsibility for the interruption 
rested upon their -shoulders alone, even the Knights <>f 
Labor — and Western Knights of Labor at that — 
shrank from taking the responsibility of a conflict with 
the nation. Of course strikes will continue to occur 

after all precautions are taken. They may come to 
the man or the company that least deserves it. But 
in impress upon the managers of corporations the 
duty of showing more solicitude for the protection of 
the public against the disastrous results of the strike 
when it does come, and the unwisdom of saying much 
about the sacredness of the rights of private property 
under the Constitution at a time when such words can 
only irritate the employees and alienate the suffering 
public. 

There i-. indeed, a sacredness of property right in this 
country which goes far beyond the 4 letter of the Con- 
stitution. The Constitution guarantees that no man 

shall he deprived of his property without due pr< 
of law; that no state shall pass any law impairing the 
obligation of contract; and that a corporation has the 

[94] 



ETHICS OF CORPORATE MANAGEMENT 

right of a person in the sense of being entitled to fair 
and equal treatment. The conservatism of the Ameri- 
can people goes farther than this. It supports a busi- 
ness man in the exercise of his traditional rights, be- 
cause it believes, on the basis of the experience of 
centuries, that the exercise of these rights will conduce 
to the public interests. It puts the large industries of 
the country in the hands of corporations, even when 
this results in creating corporate monopoly, because it 
distrusts the unrestricted extension of government 
activity, and believes that business is on the whole 
better handled by commercial agencies than by politi- 
cal ones. But every case of failure to meet public 
needs somewhat shakes the public in this confidence; 
and tliis confidence is not only shaken but destroyed if 
the manager of a corporation claims immunity from 
interference as a moral or constitutional right, inde- 
pendent of the public interests involved. 

Personally. I am one of those who look with serious 
distrust on each extension of political activity. I 
believe that the interstate commerce law did more to 

prevent wise railroad regulation than any other event 

[96] 



STANDARDS OF PUBLIC MORALITY 

in the history of the country. I think that the eourts 
would have dealt with our industrial problems better 

than they have done if. the anti-tru-t act had never 

been passed. I have gravely doubted the wisdom of 

some of the more recent measures passed by the national 
government. But I cannot shut my eyes to the fact 
that these things are what business men must expect 
unless business ethics is somewhat modified to meet 
existing conditions. Industrial corporations grew up 
into power because they met the needs of the past. To 
stay in power, they must meet the needs of the present, 
and arrange their ethics accordingly. If they can do it 
by their own voluntary development of the sense of 
trusteeship, that is the simplest and best solution. But 
if not, one of two things will happen: vastly incre 
legal regulation, or state ownership of monopolies. 
Those who fear the effects of increased government 
activity must prove by their acceptance of ethical 
duties to the public that they are not blind devotees of 
an industrial past which has ceased to exist, hut are 
preparing to accept the heavier burdens and obligations 
which the industrial present carries with it. 

[96] 



CHAPTER IV 

THE WORKINGS OF OUR POLITICAL 
MACHINERY 



# 



CHAPTER IV 

THE WORKINGS OF OUR POLITICAL 
MACHINERY 

WHEN a young man starts out in life, he will 
always find a great many excellent people ad- 
vising him to go into politics. In order that 
this advice may be good advice, one important word 
needs to be added. He should be told to go into 
politics intelligently. Many of the people who give 
the advice think that the going is the main thing, and 
that the intelligence will take care of itself. This is a 
rather widespread mistake. I received not long ago 
a most charming letter from a lady of a good deal of 
experience in philanthropic work, in which she said 
that the great danger under which the country suffered 
was the disinclination of educated men to take office. 
I was obliged to answer that I had not as a rule noticed 
any such disinclination. Educated American citizens, 
like American citizens of every other class, are as a 

[99] 



STANDARDS OF PUBLIC MORALITY 

rule quite ready to accept any important public office 
which their fellow -count ryincn may be willing to in- 
trust to their charge. The question is whether they 
are willing to take the preliminary steps necessary for 
getting elected. I have grave doubts whether the lady 
who was so urgent in advising educated men to take 
office would have been prepared in the majority of 
cases to recommend the means by which they might 
mo>t surely obtain it. When a conscientious and 
honorable man tries to exercise political influence, he 
Usually finds himself face to face with the necessity 
of some disagreeable compromises. To secure an 
office which will enable him to accomplish anything, 
he frequently has to shut his eyes to a number of prac- 
tices which he knows to be bad; and he sometimes has 
to place himself in a position where he seems to ap- 
prove of them by his toleration. Under these circum- 
stances the man who goes into politics indiscriminately, 
without the exercise of a good deal of judgment, is 
apt either to abandon it very quickly or to find himself 
forced into a somewhat different position from that 

which he intended at the start. "I can get medicine 

[ 100 ] 



WORKINGS OF OUR POLITICAL MACHINERY 

into a patient easily enough," said a wise physician; 
"but heaven knows how to get it out." This argument 
against the indiscriminate practice of medicine holds 
equally good, I think, against the indiscriminate practice 
of politics. 

In the earlier lectures we discussed some of the 
underlying ideas on which the present industrial 
system is based. I purpose in this lecture to try to 
do the same thing for our political system; to examine 
the relation between existing methods of government 
and the historical conditions which have called them 
forth; to see what are the practical limitations under 
which we necessarily act when we go into politics, 
and what are the practical possibilities for improving 
the general condition of the country which he ahead 
of us. 

Our political organization is more complex than 
our industrial organization, and it is more difficult to 
make a brief history which shall single out its main lines 
of development and separate them from the mass of 
details by which they are surrounded. The chief 
questions which I want to consider are connected with 

[ioi] 



STANDARDS OF PUBLIC MORALITY 

the origin and actual working of representative 
eminent in the United States. How far has this sj 
fulfilled the purposes of those who established it ? How 
well <lncs it tneel the need- of the country as it stands 
at presenl ? What unforeseen consequences has it 
brought in its train? You must pardon me it', in 
this discussion, I seem to omit many things which ap- 
pear of importance, and content myself with inadequate 
proof of some of the propositions advanced. The 
theme is so vast that we can only deal with its main 
principle-. 

Our state constitutions and our national Constitu- 
tion were chiefly based upon English experience. It 
i> true that the men who framed them had generally read 
the Greek and Latin classics, and that some of them 
were fa miliar with the more recent history of France or 
of Holland ; hut their real working experience had been 
with English law and English traditions. In England 
from the thirteenth to the eighteenth century they had 
seen a contest of a king on the one side, striving to 
get centralized power into his own hand-, and a Par- 
liament on the other side, striving to restrict that power 

[ ios ] 



WORKINGS OF OUR POLITICAL MACHINERY 

in the interests of national freedom. This Parlia- 
ment was what its name implied — a place for parleys 
and discus-ions, wherein the public opinion of the 
country could be developed and formulated. L'nless 
the king gave opportunity for such discus-ion. the 
people would not pay him the taxes which he needed for 
earning out his projects of ambition in foreign lands. 
By its debates Parliament held up to odium the tyran- 
nical acts of a king which might otherwise have es- 
caped notice, and united public sentiment on a great 
many matters in which otherwise it would have re- 
mained disunited and powerless. All its legislative 
functions were of comparatively slight importance as 
compared with this power to educate public opinion, 
and thus protect the nation against tyranny. 

In the government of our colonies and states, and 
still more clearly in the national Constitution, American 
publicists tried to reproduce as closely as possible the 
English Parliament in its functions. They were 
afraid that a president or governor might strive to 
become a monarch. They therefore hedged him about 
with representative assemblies. As England had her 

[ 103 ] 



- I tNDARDS OF PUBLIC MORALITY 

Lords and her Commons, ^<> the various American 
legislatures — national, state, and municipal — had 
their upper and their lower chambers. In <me re- 
spect only did American legislatures differ widely from 
that of the mother country. Representation in an 
English Parliament had ben n a somewhat haphazard 
affair. The Lords represented only themselves. The 
Commons represented but a very small part of the 
English people. If the discussions in Parliament 
reflected the popular voices outside, it seemed more a 
matter of happy accident than of logical necessity. 
But in America the assemblies were made really rep- 
resentative, instead of nominally .so. The districts 
which chose members of the legislative assembly were 
made a- nearly equal in numbers as the circumstances 

admitted; and this fact, coupled with the system of 

universal suffrage, seemed likely to make Congress and 
the various state legislatures express the popular wishes 

and popular demands more adequately than the Eng- 
lish Parliament had ever done. 

But in the course of the first century of our existence 

two or three developments took place which, without 

[104] 



WORKINGS OF OUR POLITICAL MACHINERY 

changing the form of our Constitution, made a very 
great change in its practical workings. Chief among 
these was the invention of better means of communi- 
cation, particularly the telegraph ; and the consequent 
growth of the newspaper press as a forum of public 
discussion. At the close of the eighteenth century 
Parliaments and Congresses had been the places where 
public opinion was formed. In the middle of the 
nineteenth this was still partly true. But at the end 
of the nineteenth it had become practically untrue. 
Newspapers have appropriated this function of Par- 
liaments and Congresses. Parliamentary debate has 
not the influence which it had in the days of Madison 
and Hamilton, or even in the days of Webster and Clay 
and Calhoun. People no longer send their represen- 
tatives to Congress to tell what has happened in their 
districts, and await with eagerness the return of those 
representatives to know what other people think about 
it. The telegraph has published the facts months 
before the legislature convenes. The press has dis- 
cussed the bearings of those facts in every aspect. 

Assemblies that were once '"deliberative" have ceased 

[105] 



STANDARDS OF PUBLIC MORALITY 

to be bo, because all the deliberation baa been done 
before they meet. 

The Gist body to be affected by this change was the 
electoral college. The framers of the Constitution 
expected thai citizens of different states would choose 

elector-, and that these elector- would meet and discuss 

who were the best men for president and \ ice president. 

But the people SOOn began to have ideas of their own 

as to whom they wanted for these offices. They hound 
their elector- by instructions in advance. The members 
of the electoral college were 4 -imply charged with the 
duty of registering a decision already made, not of con- 
tributing to the 4 formation of a new one. A simi- 
lar change took place in the functions of Congress 
— more -lowly, because it is not so easy to instruct 
your representative concerning his vote on the dif- 
ferent measures which may come up a- on his choice 
of candidate- for specified otliee- — hut nevertheless, 
a- the years went on, unmistakably and surely. The 

people who went to Congress a century ago were sent to 

inform themselves concerning public need-, with a view 

of arriving at a common understanding. The people 

[ 106 ] 



WORKINGS OF OUR POLITICAL MACHINERY 

who are sent to Congress to-day go under instructions 
from their representatives, with a view of securing 
a strong majority for those views, if they can, or a 
vociferous minority, if that is the best that may be 
done. 

All this has been clearly enough recognized. But 
one very important fact in connection with it which 
has not been recognized is a resulting change in the 
conception as to what congressional legislation really 
means. The old theory was that Congress should 
try to arrive by its debates as nearly as possible at a 
common understanding of what was for the interests 
of the country. To form public opinion was the first 
duty; to give effect to that public opinion by statute 
the incidental one. But the present theory is that 
Congress should enact whatever a majority of both 
Houses may desire, without even trying to secure a 
common understanding. To-day the effort of each 
legislator is to get a majority in favor of a bill that suits 
his party or district, and let the rights or wishes of other 
parties or districts take care of themselves. Statute law, 
under this changed view, is no longer an expression 

[107] 



STANDARDS OF PUBLIC MORALITY 

of the public opinion of the whole country. It i- an 
enactment by the representatives of a part of the 
country of the things which they deem Tor the interests 
of their constituents, subject only to the restrictions 
which will be imposed by the courts. 

This change has bad far-reaching effects, both on our 
conception of law and on our methods of government. 

The first and obvious effect is that a great deal more 

Statute law is enacted under the new system than was 
possible under the old. It is far easier to get a majority 

to agree concerning their interests than to get anything 
like a consensus of opinion as to what i> the interest 
of the whole people. This increase in quantity 
legislation, however, has been accompanied by a 1<>-s 
in efficiency of legislation. There are more statutes, 

hilt they art 4 not so well enforced. 

Some of them are not enforced at all. When law 

represents public opinion concerning what is needed 

for the public, its enforcement takes care of itself. 

But when law represents what a number of individuals 

deem to he for their own interest, members of the 
minority who are hurl by the enactment cannot he 

[108 J 



WORKINGS OF OUR POLITICAL MACHINERY 

expected to take very active measures in its support. 
If such a law too outrageously violates their sense of 
justice, they will sometimes put obstacles in the way 
of its enforcement ; and when any considerable num- 
ber of good men treat a statute in this way, its 
efficiency is at an end. A law can be enforced against 
the opposition of bad men, because the bad men do 
not count for much in the support of any law whatever. 
It cannot be enforced in the face of the active oppo- 
sition of a considerable number of good men, because 
the thing that makes law effective is the readiness of 
good men to support it. A majority of the legislature 
has an apparent power to enact what it pleases, within 
the very wide limits set by the Constitution ; but many 
a statute passed under such circumstances, though 
drafted with the utmost care and possessing all the 
external characteristics of a good law, is destitute of 
the public backing which is needed to give it vitality. 

A five-year-old boy that I heard about came to his 
mother carrying a dead cat by the tail, and laid it at 
her feet with the indignant expression, "Mamma, 
here's a perfectly good cat that I found thrown away 

[109] 



STANDARDS OF PUBLIC MORALITY 

in the ash barrel/ 1 The statute books of our country 
arc full of these perfectly good cats thrown away in 
the ash barrel — cats which possessed a head and 
tail and four paws, but which lacked the internal force 
ssary to give them life. 
All this mass of selfish statutes inadequately enforo d 

produce- a certain contempt for law and legislation 
which i> had for the interests of democratic government 
But then' i- another set of results, and perhaps an even 

worse set, which come about when a law has enough 
strength behind it to be more or less fully enforced, hut 
has been conceived in such a partisan spirit that its 
working i- resolutely contested by all the technical 
means which the court- allow. 

It will frequently happen that a law designed to 
meet a public need i- so ill drawn that in trying to 
remedy one injustice it produces another, or that in 
trying to meet the demands of new condition- it does 
violence to well-recognized rights created in the past. 
The court- examine situations of this kind. If the 
injustice occur- only in a few individual cases, they can 

give relief to those individual-. If it is widespread, 

[110] 



WORKINGS OF OUR POLITICAL MACHINERY 

they either construe the law out of existence or declare 
it to be unconstitutional. They exercise an efficient 
and necessary protection of the rights of the minority. 
The law as expounded by the courts has certain very 
considerable advantages over the law as drafted by the 
legislature. In the first place, judge-made law is the 
work of experts, instead of that of amateurs. It is the 
work of men who know by long professional experience 
what will be the result of compelling people to do certain 
things, or to leave undone certain other things. Another 
advantage that the courts have over the legislatures 
is that their decisions are, in theory at least, based on 
a consensus of opinion concerning the public interest, 
rather than a majority vote concerning private interests 
or opinions. Good law, according to the old theory, 
is good common sense, set forth by judges of high 
character and long professional training in such fashion 
as to command general acquiescence, first among other 
men similarly trained, and next among the whole 
community. 

In old days this aspect of the matter was strongly 
emphasized by lawyers and statesmen. Nothing is 

[in] 



STANDARDS OF PUBLU MORALITY 

more noticeable in the opinions of tin* English judges 
arlier centuries than the clearness with which they 

made the reasons for their action- intelligible to a man 
who would take the trouble to study them. These 
>ns may not always commend themselves to our 
judgment to-day; but such as they were, they were 
plainly and fearlessly set forth. Besides this educational 
character of the judicial decisions in earlier times, 
there appears to have been a general acceptance of the 
duty of jury service by good men — and I may add, 
an administration of the law which made it more 
erally possible For good men to accept jury service than 
is the case to-day. The jurors who took part in these 
old-fashioned trials received a practical education in 
applying good legal principles to concrete cases; and 
they L r <>t an understanding of these principles which 
they carried into many other lines of activity, public 
and private. 

To-day all these things have changed. In a laige 

part of our country a man who serves ou a jury in a 
state court is not allowed to get any idea i)\' proper rules 
of evidence or of proper principles of law. lie i- made 

[112] 



WORKINGS OF OUR POLITICAL MACHINERY 

to take a month to transact business the wi _ way 

which, if handled in the right way. could have been 
finished in half a week. His time and intelligence are 
placed at the mercy of criminal — and often exceedingly 
criminal — lawyers. We have been told that one im- 
portant function of the jury system is to prevent the 
administration of the law from being too good for the 
people who live under it. But it makes a great dif- 
ference whether this result is obtained by educating 
the people up to the level of the law. or by bringing the 
execution of the law down to the level of the unedu- 
cated intelligence of the people. The former was the 
old way — the way that still prevails in England, and, 
speaking broadly, in the Federal courts of the United 
States. The latter is the practice which seems to pre- 
vail in most of the state courts west of the Alleghany 
Mountains. 

For the loss of their authority to protect the jury 
against the improper artifices and unnecessary delays 
of unscrupulous counsel, the judges cannot be fairly 
criticised. It is the legislatures of the countrv. earning: 
to an unwarranted extreme the theory of giving the 
I [113] 



STANDARDS OF PUBLIC MORALITY 
prisoner at the l>ar every possible chance in his favor, 

that arc responsible for making jury trials a mere par- 
ody of what they oner were. Hut for the loss of their 

influence on public opinion as a whole our judges them- 
selves are to a considerable degree to blame. They have 
stopped explaining the reasons for their decisions and 

have fallen hack too much on mere citations of prece- 
dent. They support their views, not by the authority 
of common sense, hut by the authority of office. They 
say that law derives its compelling force, not from the fact 
that it is consonant with reason, but from the fact that 
it has been promulgated in a certain specified way; 
and that it is their plain duty to consider, not whether 
a thing is sensible, hut whether it is regular. This is 
one of those half truths which can do a great deal of 
harm if improperly applied. We saw last week how 
the rights of corporate property had been held sacred 
primarily because they had been used in a manner which 

was on the whole beneficial to the community; hut 

that if a manager under certain circuimtances -aid SO 

much about the sacredness of his right that he lost 
sight of the question whether he was using it benefi- 

[114] 



WORKINGS OF OUR POLITICAL MACHINERY 

cially, he endangered the continuance of that right itself. 
In like manner the regular utterances of the courts have 
been accepted as law because the nation recognized 
them as sensible; but when the courts claim to make 
regularity the test of law, independent of the question 
of sense, they undermine the public confidence which is 
necessary for the successful exercise of their authority. 
This process has already gone to a dangerous length. 
When the question of the construction or the constitu- 
tionality of an Act is brought up in the courts, the public 
regards the matter in the light of a contest between a 
majority exercising its political powers on the one hand, 
and a minority standing upon its technical rights on 
the other hand. It is a game of politics versus precedent, 
with the Constitution as umpire. The public does not 
regard the statute as passed by the legislature, or the 
precedent as interpreted by the courts, as representing 
in either case any general public sentiment. Nor is it 
easy to see why it should. The legislatures for the most 
part frankly admit that they are striving to advance 
the claims of the majority by all practicable means. 

The courts claim to represent, and in a certain sense 

[115] 



-I kNDARDS OF PUBLIC MORALITY 

do represent, organized public opinion; but they dis- 
card as inconsistent with modern professional traditions 
the means which lie at their hand for keeping that 
public opinion behind them by giving the reasons for 

their acts. It is hard to guess what will heroine of OUT 

old ideas of the sacredness of law if this condition of 
things is allowed to go on indefinitely. 

Meantime the new theory of representative govern- 
ment has had effects on practical politic- scarcely 
less Fundamental than those which it has had upon law. 

A number of congressmen go to Washington pledged 

to act in the interests of those who senl them. This 
pledge is not an explicit one. There will always be 
men who disregard it in certain emergencies, and who 

prefer the higher claims of the country to the lower 
claim- of the party or district. But these cases will 
be relatively few. When Mr. Lamar of Mississippi 
voted for the gold standard in 1878 because he was con- 
vinced that the country needed it, although his con- 
stituents thought that a silver standard was better, 
it excited universal comment and considerable con- 
demnation. Many men who admit in theory that 

[lie] 



WORKINGS OF OUB POLITICAL M.\( IIINKKY 

their duty to the country is greater and mote imp 
than their duty to their constituents disclaim their 
responsibility for putting this theory in practice. They 
say frankly thai while our government would be a 

better one if everybody recognized that principle. 

it will only introduce confusion and injustice to-day 
if a few good people work for the benefit of the nation 

while a great many people who are not so good have 
only the claim- of the party or the district in dew. 
They hold that the selfishness of a number of sections 
of the country, each pulling in its own w ay, will produce 
a fairly salutary general result for the country as a 
whole. Equity between the different part- becomes 
in their minds a more prominent consideration than 
the general interests or safety of the whole, which they 
are willing to trust Providence to take care of. They 
are in the mental attitude of the little girl who saw a 
picture of Daniel in the lion's den, and whose sym- 
pathies were excited, not so much by the danger or 
probable fate of the prophet, as by the disadvantageous 
position of a little lion in the corner who, as she said, 
probably wouldn't get anything. 

[117] 



STANDARDS OF PUBLIC MORALITY 

This is a false way of looking at things; but it i- very 
widespread. It represents one of those unwarranted 
inferences from the doctrine of competition of which I 
spoke two week- ago. I f a number of different persons 
arc trying to serve the public treasury in their own way, 

it is wise to let thcni all do it, and see which way i> best. 

Hut if th<>-c same persons arc trying to serve themselves 
in their own way. at the expense of the public treasury, 
the case is totally different. The element of benefit 
to the treasury, which is so conspicuously present in 
the case of real competition, i> conspicuously absent 
in the case of conflicts and compromises between the 
representatives of different districts in drafting an ap- 
propriation hill or in laying claim for a share of public 
offices. 

To many a representative who goes to Congress, this 
work i)\' getting appropriations and offices for his dis- 
tricl becomes the main pari of his duty, for whose sake 

he can neglect many other parts which are really more 

important. The worst of it is that his constituents 

Support him in that view. Where this kind of ethics 

prevails the kind of government which our fathers 

[118] 



WORKINGS OF OUR POLITICAL MACHINERY 

intended is impossible. The legislature not only fails 
of its primary purpose in making the right kind of laws, 
but perverts its secondary purpose by exercising the 
wrong kind of checks upon the administration. When 
people countenance this way of looking at things, a 
representative can exact a price for his support of the 
administration on a matter of public interest ; and the 
more the public interest is concerned in the passage 
of the measure, the higher the price he can charge. 
The power of the executive in the nation, in our states, 
and in many of our cities, is made dependent upon the 
consent of a majority of the legislative body by which 
he is surrounded. This consent was originally required 
because our fathers, having the experience of England 
fresh in their minds, were afraid that an executive 
might seek tyrannical power, and they wanted to bring 
the restraints of public opinion to bear upon him from 
every possible quarter. But things have now taken 
such shape that the representatives, instead of using 
public opinion to prevent the executive from acting 
selfishly, use their own power selfishly to prevent the 
executive from doing what public opinion demands, 

[119] 



STANDARDS OF PUBLIC MORALITY 

until be satisfies the local and personal claim- of the 
districts which they represent. Does the President 
want to name the besl man for a judgeship? Con- 
firmation is refused because the appointment is not 
acceptable to a certain number of senators essential 
to a majority. Does the governor wish to choose the 
best men for a state commission? He is t< >1< 1 frankly 
thai it is not a question of the best man; thai if 
a commission i- to be authorized at all, there must be 
one from White county, and oik from Green county, 
and one from Black county. Under our existing system 
of representative government the parts have it in their 
power to exact a price for not standing in the way of 

the interests of the whole. In the old days people 

senl representatives to Parliament in order to insure 

that the injury of one might be the concern of all. 
To-day we have so changed the underlying principle 
of the system that the concern of one i- made the injury 

Of all. 

The had politics resulting from this perversion of 
representative government have been even harder to 

deal with than the had laws. For the power of making 

[1*0] 



WORKINGS OF OUR POLITICAL MACHINERY 

bad laws can be, and has been, restrained. A large 
majority of our states, seeing the chaos which results 
from indiscriminate legislation without expert knowl- 
edge, have either passed state constitutions taking out 
of the hands of the legislature the power of making 
any laws, good or bad, on really important subjects, 
or they have had the mass of old state statutes codified 
by experts who exercise such large powers of rejection 
and choice that the existing laws maybe said to have been 
the work of the codification committee rather than of a 
legislature or series of legislatures. But every restriction 
of the law-making power of a representative assembly, 
however salutary in itself, leaves the hands of the rep- 
resentative freer for selfish or sectional activity in other 
directions. If he is not sent to the capital to make laws, 
what is he there for? What, indeed, unless it be to 
get appropriations for his district and offices for his 
friends ? If he cannot do his constitutional duty 
in making the laws that the people want, what other 
constitutional duty is left to him except that of prevent- 
ing the executive from having an unrestricted use of 
its personal judgment in the government of the country? 

[ 121 ] 



STANDARDS OF PUBLIC MORALITY 

The more we cul off a representative assembly from its 

primary duty of legislation, the more we throw upon it 
the work of hampering the administration. 

I use the word "hampering" advisedly. If a man 
is chosen Presidenl to govern the country as a whole, 
and a number of men are sent to Congress to see that 
the country is not governed as a whole, hut with a \ iew 
to the interests of the separate parts, there is a perpetual 
threat of a deadlock. Exactly the same thing holds 
good regarding the relations of a governor to a state 
legislature, or a mayor to a court of common council. 
Government is made impossible without the concur- 
rence of a man who is instructed to act on one set of 
principles, and a hoard of representatives which thinks 
it i^ instructed to act on a different set of principles. 
There will always he differences of opinion between the 
two. There will habitually he a deadlock unless some 
power i> found to bring the two into harmony. The 
Constitution of the United States, and those of most 
of our States, have made it impossible for the work of 

government to be done except by agreement between 
two set- of agents who are hound to disagree. 

[122] 



WORKINGS OF OUR POLITICAL MACHINERY 

But the country must be governed, and somebody 
must be found to do it. The President may not do 
it. That stands in the Constitution. Congress may 
not. That also stands in the Constitution. The only 
man left to do it under present conditions is the party 
boss. The Constitution never thought about him at 
all, and therefore it did not prohibit his activity. The 
Constitution so regulated the machinery of election 
that the elected officers would not work in harmony 
except by a happy accident. There was no guarantee 
against a complete deadlock. But the Constitution 
did not regulate the machinery of nomination. If a 
man gets the power to control nominations both for the 
executive and for the legislature, he can furnish gov- 
ernment of the kind he wants, either good or bad. For 
he can under all ordinary circumstances refuse to nomi- 
nate either an executive officer or a district represen- 
tative who will not work in harmony with his orders. 
In the United States as it is at the present day the 
party machinery has appeared to be a necessity for 
getting the work of government done continuously and 
regularly. 

[123] 



STANDARDS OF PUBLIC MORALITY 

We kimw this well enougb in fact We know that 
if any important measure needs to be carried through, 
the essentia] thing to do is to secure the consent of the 
leaders of the dominant party. If this is done, all | 
well. It' not, it is Mocked by all sorts of unexpected 
obstacles. But we are too apt to consider this state of 

things a mere accident —to think that if we only talk 
enough against parties, and form enough sporadic in- 
dependent movements, we can do away with it. 'This \% 
an error. Parties are much too firmly established to 
be done away with in this easy manner. The power of 
party leaders — call them statesmen or call them bosses, 

as yon please — is more securely intrenched than most 
of lis realize. It is a price which we pay for certain 

safeguards to civil liberty incorporated in the Constitu- 
tion of the United States. We can hope, if we study 
real conditions carefully enough, to pass certain laws 

which will lessen the power of party leaders for evil. 
We can, if we go to work rightly, develop changes in 

our political ethics which shall lay the foundation for 
still further reform. But taking the facts as we find 

them, with our existing Constitution of the United 

[124] 



WORKINGS OF OUR POLITICAL MACHINERY 

States as it stands, and with our present system of 
political ethics, the party, working by extra-constitu- 
tional if not anti-constitutional means, is the only 
practical agency for getting the country governed at all. 

I do not mean that the provisions of the American 
Constitution have caused political parties to come into 
being. They have simply caused them to assume an 
undue and unnatural prominence. Parties will always 
exist where one set of men wants one set of measures 
and another set wants another. Each group will 
organize for the purpose of securing its end. Each 
group will find it advantageous to have a good deal of 
political machinery at its command. The peculiar 
thing about American parties is that the passage of 
certain legislative measures is not the chief purpose of 
their existence. It is a mere incident. The important 
purpose of an American party is to govern the country. 
The legislative proposals which it incorporates in its 
platform are chosen as a means of attracting a few more 
votes to keep the party leaders in office. 

Of course there have been exceptions to this rule at 
various times in our history. The democratic party 

[125] 



S I kNDARDS OF PUBLIC MORALITY 

before the war was so attached to the constitutional 
principle of state rights thai its leaders would rather lose 
office than sacrifice thai principle. The republican 
party at the time of the Civil War was -,> committed to 

the principle of slavery restriction thai its leaders would 

have stayed out of office ;i- a means of securing that 

end, rather than go into office at the price of neglecting 

it. Hut looking over the genera] history of the coun- 
try, we are reminded forcibly of the experience of Mr. 
Tom Johnson with the Pennsylvania conductor, when he 
was trying to ride over the Alleghanies on the rear plat- 
form. The conductor called his attention to the nil' 
the company forbidding him to stand on the platform. 
Mr. Johnson, wishing to make ;i- good an argument 
as possible, asked the conductor what a platform was 
made for, if not to stand on. Hut the conductor at once 
overwhelmed him with the reply, " Mr. Johnson, you're 
a politician. You should know that a platform ain't 
made to stand on. A platform's made to gel in on ! M 

There has been one other country and one other , 
in which political parties have had the same character 
that they have in the United State- to-day. Thai was 

[ 12« J 



WORKINGS OF OUR POLITICAL MACHINERY 

in England during the eighteenth century. And it is 
a noticeable fact that the English government in the 
eighteenth century had this characteristic in common 
with the American government in the nineteenth : that 
the executive and legislative branches of the govern- 
ment were so far separated that no means of harmo- 
nizing their action was provided or allowed by the 
Constitution. Under such circumstances the English 
parties at the beginning of the eighteenth century, like 
the American parties at the end of the nineteenth, were 
primarily occupied with keeping certain men in office, 
and the passage of legislative measures formed only a 
very incidental element in their plans. With this 
striking parallel in view, we may well believe that the 
separation of powers between the different departments 
of the government, and the perpetual threat of a dead- 
lock thereby produced, have as an almost necessary 
consequence the dominion of the party manager: that 
Walpole and Tweed were but different specimens of the 
same genus; and that their power, however widely 
different in its methods of exercise, was an outgrowth 

of the same cause. 

[127] 



- rANDARDS OF PUBLIC MORALITY 

I have in this lecture tried to survey the field of 
America]] politics ami indicate the rule- under which 

the game IS played. The next lecture will contain Borne 

:< stions as to the best waj to play it. 



! 1*8 J 



CHAPTER V 



THE POLITICAL DUTIES OF THE CITIZEN 



# 



CHAPTER V 

THE POLITICAL DUTIES OF THE CITIZEN 

IN the early days of the republic it was expected 
that every citizen would devote a part of his 
time to political life. To the man who was 
desirous of amusement politics supplied an attractive 
game. To him who was anxious to do public service 
it furnished the best, and often the only available 
channel. To him who was ambitious for tangible 
success it offered the highest reward. 

But as time has gone on this incidental or occasional 
practice of politics has become very difficult. A man 
cannot successfully go into public life in this indis- 
criminate way. We have grown older as a nation, 
and with increased age has come increased specializa- 
tion of employment. In a boys' school everybody can 
spend an hour a day at baseball, and play it well enough 

for all practical purposes. Twenty years later a few 

[131] 



STANDARDS OF PUBLIC MORALITY 



of the graduates of that school will have rone into pro 



- 



pi 



fessional baseball, and will be giving all their time to it ; 
the rest will not be playing it at all. The conditions 
which govern the practice of politics are different in 

many ways from \vh;it they were a hundred year- ago. 

At that time public office furnished almost the only 
reward of ambition; now there are a great many other 
rewards, both commercial and professional. At that 
time the public-spirited man found no recognized 
channels of service except those thai he followed by 

going into politics; now there are opportunities of ser- 
vice on relief boards, and school hoards, and a thousand 

other kinds of boards, which have little or no connec- 
tion with our political organization. At that time our 
communities were so small that each man was pretty 
well known to his neighbors, SO thai if he ran for office, 

they understood whom they were voting for; now he 

ha- to spend so much effort telling them about himself 
in order to stand any chance of getting nominated or 
elected that what \\a- once an amusement for the in- 
tervals <>f bis professional activity has become a most 
serious matter of busin< 

[182] 



THE POLITICAL DUTIES OF THE CITIZEN 

I still think that every American citizen ought to 
assume political responsibilities. But as I look at the 
matter, there are at least four different ways in which 
this can be done; and the obligations which go with 
these different ways of fulfilling civic duty are themselves 
widely different. One man may desire to go into poli- 
tics as a most important part of the business of his 
life, with the hope of receiving elective offices and 
attaining a dominant position in the counsels of his 
party. Another may strive to influence the conduct of 
our public affairs indirectly, by his activity in behalf of 
civil service reform and other measures calculated to 
promote better government. A third may reserve his 
political activity for special emergencies, when some 
grave crisis, national or local, justifies him in an ex- 
ceptional expenditure of time and strength. A fourth 
may content himself with that general influence on the 
conduct of political affairs which is exercised by every 
citizen who forms his moral judgment independently 
and expresses it fearlessly. One of these four modes 
of political influence each citizen should undertake to 
exercise: and, having undertaken it, he should adopt 

[133] 



STANDARDS OF PUBLIC MORALITY 

the methods and ideas accessary for serving the com- 
munity in this chosen way. Of course they arc not 
mutually exclusive. A man who has belonged to one 
of these classes may suddenly find himself transplanted 
into another, almosl without his own knowledge. Some 
grave crisis may cause the people to select political 
leaders on account of proved business ability, or on 
account of the fearlessness which they have displayed 
in some emergency, rather than through t he ordinary 
channels of party influence. But in a general way the 

four lines of activity that I have named are tolerably well 
distinguished from one another. 

Let ns take the duties of these different classes in 

order. First, what are the conditions that surround the 

man who thinks of going into politics as a profession? 

To begin with, he must l>e prepared to take it as 
seriously as he would take any other profession he might 
choose. He must accept it as a continuous activity. 
He must have the necessary time for so doing. He 
mn>{ be willing to bear the disagreeable features in- 

( i Irnl to the work. People are not going to nominate 
and elect men without knowing for what they -tand, 

[184] 



THE POLITICAL DUTIES OF THE CITIZEN 

and it takes time to show for what a candidate does 
stand. A great many people talk as though the only 
thing that a man needed to do in order to convince 
people of his character was to make them a speech. 
This is not true. Speeches do not attract as many 
votes as is commonly supposed, because the people 
shrewdly suspect that a man may not always be telling 
the truth. He may not be what he says he is. They 
want to vote for a person who feels as they feel; and 
unless a man has certain very peculiar qualities of per- 
sonal magnetism, his speeches give very little impres- 
sion about his real feelings. Through newspaper 
articles a man can reach the voters a little better than 
through speeches, because the constant reader of a 
newspaper keeps hearing the same thing day after day 
until it comes to dominate his thoughts and emotions. 
But even the most adroitly managed newspaper is a 
very uncertain means of getting votes. I suppose that 
the conduct of the New York Journal in the last cam- 
paign represented the maximum of effort in this line; 
and the effect of the Journal in getting votes for Mr. 
Hearst was on the whole a disappointment to those 

[135] 



- rANDARDS OF PUBLH MORALITY 

win » had the matter in cl Personal contact of 

man with man is what attract- vote> and ^ its offi 

Bui do man in national politic-, or even in state 
politics, can gel into personal contact with more than 
a very small proportion ^\' the voters whom he wishes 
to influence. Here is where the great importance of the 
party machinery come- in. The party is a sort of 

hierarchy, where each of the rank and tile is la 
after by the local leader; and the local leaders in turn 
are influenced bi e, until von come 

to t: :itral committee which dominates the 

whole. This is, 1 think, a chars ic which all 

efficient American party organizations have in com- 
mon. There are different ways of looking men, 
which range all the way in merit from education to 
corruption. But the element i^i personal contact i< 
nt in every case where anything s lone. 
It i- customary io talk as though these party machines 
furnished opportunities to the had man only. 1 am 
inclined to think that they furnish opportunities 
to the good man. provided he is one who is ready t 
acquainted with people and find out what they actually 

[186] 



THE POLITICAL DUTIES OF THE CIT1. 

want : one who does not regard this sort of personal 
g ;ion to his dignity. OJ course he 
will find corrupt men in the party councils, as he will 
in every other walk of life. He will find systems 
ethies which are always crude, and standards of morals 
which are sometimes low. So he will in law or in medi- 
cine. i in theology A man wh is - ueamish 
about ass tes should not go into politics, any more 
than a man who is squeamish about dogmas should 
to the Church, or than a man who is squeamish 
about bargaining should go into certain lines of bus: - - 
But if his natural tastes fit hirn for political life, he will 
find liimself morally about as well off here as he could be 
anywhere else. He will have a fair chance to fight for 
his convictions, and an opportunity to make all his 
- tell most effectively. If a man can acquire 
ght in the councils of a political party it is an in- 
valuable asset, not only for him personally, but for the 
cause g xl government in general. 

It is an asset which should not be lightly thrown 
away. The man who is in politics professionally has 
a right, and even a duty, to sacrifice much in order to 

[ 137 ] 



STANDARDS OF PUBLIC MORALITY 

preserve his influence with the party organization. 
Some people talk as though it were just as easy for a 
political leader to be independent as it is for the simple 
voter. They think that, with slight differences, what is 
good ethics for the voter is good ethics for the politician. 
With this judgment I cannot concur. The ordinary 

voter, by making himself independent of party, compels 

the different parties to bid for his vote, and he ih)c> 
not forfeit any means of influence which he previously 
possessed. The utmost that he can lose will be the 
right to go t«> the caucus <>f the party that he has aban- 
doned. But the politician who breaks with his party 
throws aside a power of reaching men and persuading 
them which control of party machinery gives, without 

acquiring any similar influence in the other party. 

In fact, any such defection on his part may lessen the 
strength of the better element in the organization op- 
posed to him. It may he that the presence oi a [j 
man in the republican machine will strengthen the hands 
of the good men in the democratic machine, by compel- 
ling the democratic party leaders to adopt a higher 
standard of conduct than they would otherwise have 

[138] 



THE POLITICAL DUTIES OF THE CITIZEN 

done. It is not his chance of office alone, but his 
chance of influencing bis associates and setting a mark 
for his opponents, that the politician throws aside when 
he deserts his party. Therefore, if a man's record 
shows that he has been honestly anxious to do public 
sendee. I am very slow to criticise him for standing bv 
his organization through a good deal that is rather bad. 
But if he is to retain his self-respect and the respect 
of his associates, the possibility of doing public good 
must be clearly the dominant motive. This is why 
certain classes of people have to keep out of politics as 
a business. Members of the civil service, for instance. 
A man who is employed by the people at a salary, for 
non-political work,, will if he goes into polities always 
be under considerable suspicion as to his motives. 
Xor can a man safely make polities his occupation 
unless he has some independent means of support to 
fall back upon, if he has to break with his party. He 
has no right to put himself in a position where he may 
have to choose between starvation for his family or 
disservice to his country. I do not mean that every 

man who goes into politics ought to be independently 

[139] 



STANDARDS OP PUBLIC MORALITY 

rich though the independently rich man does have 
certain very great advantages in leading a fight for 

(lean politics); but that in default of wealth he OUght 

to have had such training in law or journalism, <»r some 

other profession which he can readily resume, a- t<> 
him a tangible alternative to fall back upon if political 

preferment may only he had at the sacrifice of his honor. 
Otherwise neither he nor those about him can he Mire 
that the public motive is really the dominant one when 
he stands by the 4 party. If he lias not this advantage, 
and yet i- anxious to do all the political service he can, 
he i- far Letter oil' in OUT second group than in the first 
This second group consists of those who aim to pro- 
mote good government, not by taking political office 
themselves, but by insuring the passage and enforce- 
ment of measures that will raise the general character 

of our politic- as a whole. Any man who undertakes 
this ha- plenty of hard work before him: but he does 
not need to abandon his regular profession, nor to 
identify himself very closely with any one party. If 
he can suggest a law which seems likely to produce 

better government, he does not have to have party 

[140] 



THE POLITICAL DUTIES OF THE CITIZEN 

backing in order to get a hearing. Reform measures 
often find support in very surprising quarters. Many 
a politician who himself uses bad methods will en- 
courage the passage, and even the enforcement, of laws 
to prevent the use of those methods in the future. The 
reason for tins paradox is not hard to find. Almost 
every man who goes into politics is anxious to leave 
behind him as good a record as he can. As he gets 
higher and higher up, he sees that the things that he 
has used to help himself are regarded by many people as 
hurtful to the country. He does not feel strong enough 
to dispense with these means, while his opponents in 
the party or outside of it continue to use them, because 
it would cost him a continuance of his power. But 
he often believes that the passage of a general law which 
takes that means out of his hands and his opponents' 
alike will leave him a good chance to retain power and 
at the same time identify him and his party with an 
important measure of public service. I do not mean that 
all politicians will think or act in this way; but there 
will be enough of them who think and act in this way 
to give unexpected help to the advocate of clean politics. 

[141] 



SI kNDABDS OF PUBLIC MORALITY 

The laws of thifl kind which we OUghl to have can he 

divided into three classes: laws to prevent corruption! 
to fix responsibility, and laws to promote inde- 
pendent voting. 

In the first class the best example is the civil service 
law. Many who read these words can remember a 
time when nearly the whole salary list of the govern- 
ment was regarded as the prey of spoilsmen in the game 
of politic-. The efforts of disinterested men, of differ- 
ent parties, and some of them without definite party 
affiliations of any kind, made people see that this 
tcm was bad both for the efficiency of the public service 
and for the cleanness of political life as a whole. Another 
set of laws to take away the chance for corruption, not 
SO old nor SO well worked out as the civil service law hut 
accepted in principle by most of our states, is exempli- 
fied by the secret ballot acts, which make it unsafe 
for a man to buy votes because he never can he quite 
sure that the goods will he delivered. There are other 

statutory means of preventing corruption, like laws pro- 
viding for the publicity of campaign accounts, which 

have hardly passed beyond the experimental sfc 

[1«] 



THE POLITICAL DUTIES OF THE CITIZEN 

01 hews bo fix responabflftr. the best examples are 
seen in same of oar newer city charters. Under the 
old system, where a mayor was surrounded by a board 

righis in sanctioning appointment? to municipal office, 
no one could ever tell who was to blame for waste and 
inefficiency. The nay or could n: 
eminent if he tried, and theref ore could not be held 

r^i-insiV.r ::' lis ::T:ni::: — .if z:.i Tie i'.i^:zizz 
considered themselves accountable only to their sup- 
porters and friends in their several districts: and if 
the interest of the whole community suffered- they dis- 
claimed responsibility for the general result. By riving 
independent powers to one man. so that he could be 
pr.-isi-i : ;: ^ : : ;; — ::1 mi "nlin-ri : :: '. :- i ~~ :rk. :: ~is 
found, not that he abused his powers, but that he sought 
the credit which resulted from exerciang them as well 
a? Lt kzr— 'z:~ I-::i::nei:-ii:~e Li^ - T ; ::i:ii 
the ideal form of city charter. A great deal erf public 
spirit and disinterested service on the part of the citizens 
is requisite in order to run an American city under any 
zLarter. L:~ e~e: *:•:•£ Bu: ~e Lave ir. n.17 places 

[MS] 



STANDARDS OF PUBLIC MORALITY 

removed the worst features of a system that prevailed 
thirty years ago, which put a positive premium on cor- 
ruption and prevented anybody, however good or dis- 
interested, from rendering the service which he wanted 
to. 

A law separating the time of local and national elec- 
tions is a good example of the kind of measure which 
will promote independent voting. In municipal affairs, 

except perhaps in cities of the very largest -i/.e, there 
IS not the same need of parties that there is in national 
affair-. Each citizen is interested to have the city's 
business well done ; each citizen ought to know tolerably 

well the business capacity and character of men who 
are prominent enough to become candidates for mu- 
nicipal office. But if the municipal election is placed 
at the same time as the national election, the inevitable 
tendency is to make nominations a party matter and 
to let the man's vote for municipal candidates he a good 
deal influenced by his preferences on the national ticket 

If the local election can he put at an entirely different 
time from the national one, the chance for an indepen- 
dent ticket is infinitely greater, and if in addition we 

[144] 



THE POLITICAL DUTIES OF THE CITIZEN 

can devise what is known as a direct primary law, in 
which every voter belonging to a given party shall have 
a fair and equal chance to say who shall be nominated, 
instead of being compelled to work through a system 
of caucuses which gives every advantage to the pro- 
fessional politician, we increase the probability of 
getting businesslike nominations from the parties them- 
selves. The problem of direct primaries is not one 
which has been fully worked out ; and I may perhaps 
be unduly prejudiced in favor of the reform because I 
happen to have seen especially good instances of its 
operation. But I do not know any field of effort which 
is more promising for a man who wants to do political 
service, and who has not the time or inclination to go 
into politics, than the development of the direct primary, 
or of some similar means which will give the average 
voter the best chance of expressing his views before 
the nomination. 

It has been found much harder to separate state 

issues from national ones. The state is so large that 

people cannot know a man's probable fitness to be 

governor as they can know his probable fitness to be 

l [ 145 ] 



STANDARDS OF PUBLIC MORALITY 

mayor. Hut I believe thai we oughl to try to do for 
our states what we have done for our cities, by removing 
all artificial attempts to tie local and national issues 
together. This is why I favor dired election of United 
States senators by the people. It i- not because we 
send specially bad men to Washington under the present 
Bystem. It is not because of the effect of the present 
system on the character and composition of the senate. 
It is because of the effect of the present system on the 
character and composition of the state legislatures. 
A man i- senl to the State capital to make some laws 
for the people of hi- state; and he finds that his first 
duty — in some sessions almost his only duty — is 
to elect a United State- senator. A more direct means 
of preventing the elector from getting the kind o\' local 

law- which he wants could not possibly be devised. 
lie i- in a large number ^( cases compelled to vote 
either for a representative who will make the kind of 

law- he want- for the state but will -end the wrong man 

to the United State- Senate, or for one who will make 
the kind of law- he doe- not want for the state but will 
-end the right man to the United State- Senate, lie 

[ 146 ] 



THE POLITICAL DUTIES OF THE CITIZEN 

generally chooses the latter; and that is one of the 
reasons why the politics of many of our states are so 
bad. People are not allowed to elect state officers on 
the basis of state issues. 

It is hardly worth while to multiply instances of 
statutory changes which would promote cleaner politics. 
While we cannot make men good by Act of Congress 
or General Assembly, we can make it either a great deal 
easier or a great deal harder for a good man to do what 
he wants. The man who succeeds in making it easier 
does just as much public service and has just as honor- 
able a political career as if he had himself taken office 
or been identified with the actual government of the 
country. And of equal importance with the work 
of the man who secures the passage of new laws of the 
right sort is that of the man who helps systematically 
toward the better enforcement and more intelligent 
administration of the laws which we have already. 
The work of a man like Judge Lindsey in the Juvenile 
Court of Denver is in no sense political; but it would 
be hard to find any one in the whole country whose 
professional career has had more to do with the improve- 

[147] 



- I LNTDARDS OF PUBLIC MORALITY 

merit of politic- and of government than has Judge 
Lindsey through the effects, direct and indirect, trf his 
Juvenile ( !ourt 

The duty of the third class that I have named — 

the men who feel thai the} can take up politics only in 
grave emergencies - requires veiy little comment. 

A nation, like an army, needs a strong reserve; and if 

a man cannot be in the front rank all the time, he does 

good work by accomplishing all he can when the reserves 

are called out. A man in such a position has this 

special advantage, that, not being bound by party 
affiliations, he is freer to make his choice, and to let 
people see that it is an unbiassed choice-, in times when 
party lines have broken up. For leadership in a tre- 
mendous uprising of the whole people, it is sometimes 
an advantage not to have been habitually regarded 
as the representative of a particular party. And even 
when such a leader is turned out of office, as he is 
likely to he before very long, he can have the satis- 
faction of thinking that he has left behind him a h 
sum of permanent results than hi- followers in the first 
flush of their disappointment are willing t<> see. No 

[148] 



THE POLITICAL DUTIES OF THE CITIZEN 

city which has become thoroughly reformed, even for 
a brief time, ever gets back to practices quite as bad as 
those which it once had. The forces that overthrew 
Tweed in New York had a comparatively brief period 
of success; but no body of New York officeholders 
has ever again dared to do the things that Tweed and 
his friends did, or anything like them. The reformers 
who obtained control of many of our cities a year or 
two ago are inclined to be discouraged at the reaction 
which seems to be taking the fruits of victory out of 
their hands. But that reaction, at its w T orst, is not likely 
to carry people back to the point where they were when 
the reform movement started. 

We are in perpetual danger of overestimating the 
power of a great moral uprising to change the face of 
our politics, and of being unduly disappointed because 
these impossible hopes do not turn out realities. It 
seems to most people as if a great wave of public senti- 
ment, which unites the good and even the indifferently 
good of all classes and parties, ought of itself to estab- 
lish a permanent government too strong to be over- 
thrown by politicians. It seems as though the public 

[149] 



STANDARDS OF PUBLIC MORALITY 

interests in favoi of such a movement were bo la 
and the private interests opposed to it so small, that 
the contesl between the two could be left to take care 
of itself. Bui we all know the comment of the man 
who, when he was told that God was stronger than the 
devil, objected that the devil made up for his inferior 
strength by his superior activity. We can hardly ex- 
pect the leaders of a reform movement, who go into the 
work at the sacrifice of their regular business, to 
maintain year after year the continued activity which 
is characteristic ^\' the successful politician. Still less 
can we expect it of their followers. A thousand details 

which an Organized party machine would look after 

are left unheeded. Want of attention to these details 
alienates some supporters of the movement, and sets 
others at cross purposes. The underlying principles 
on which the reformers started remain as impor- 
tant as ever; but the mismanagement ^f the details 
distracts attention from these principles until people 
are willing to sacrifice some of them for the sah 
having the government more smoothly run. "Will 

he not fail me in a great moral crisis ? " asks the heroine 



THE POLITICAL DUTIES OF THE CITIZEN 

in a recent story of her married sister, who is urging 
her to accept a match which seems somewhat advan- 
tageous. And the reply is, "I cannot say; but he has 
good manners at his meals. I do not think we have ever 
had a great moral crisis in our family; and you have 
to eat meals three times a day." There always will 
be some idealists in politics to whom the possibility 
of a great moral crisis is more important than the meals 
three times a day. These men are to be encouraged. 
We are never likely to have too many of them. But 
thev will not generally get elected to office. Most of 
the time their work will be that of critics. Only in 
emergencies will they be called upon for constructive 
leadership: but what they can do then makes up for 
all their disappointments and failures at other times. 

There is apt to be a misunderstanding, and a most 
unwise misunderstanding, between the emergency 
worker and the man regularly connected with politics. 
The former regards the latter as hidebound. The 
latter regards the former as unpractical. But each 
is necessary in the fight for clean polities ; and I may 
add that each is necessary for the usefulness of the other. 

[ 151 ] 



STANDARDS OF PUBLIC MORALITY 

A friend of mine said to me, not so veiylong ago: "I 
know President Roosevelt so well that I can tell him 
the truth; and I Bay to him, 'The trouble with you is 
that you are narrow-minded. You don't like the New 
York Evening Post. You don't see that the Evening 
I is necessary to make people accept you as the less 
of two evils."' 

And now we come to our fourth £roup, which after 
all must he the largest influence in the politics of the 
country — the people who do not aspire to leadership, 
regular or even occasional, hut whose votes and opinions 
and moral judgments make the country what it is. 
What obligation should he emphasized in their code 
of political ethics ? What can they do for good public 
morals ? 

First, they can vote independently. The reason> 
which prevent the politician from always speaking 
his mind on a doubtful issue do not apply in the case 
of the ordinary citizen. He is bound by no set of obli- 
gations to the party with which he may have been asso- 
ciated. He has no highly organized influence, built up 
through a series of years, which he casts aside by break- 

[ i* ] 



THE POLITICAL DUTIES OF THE CITIZEN 

ing over party lines. I do not mean that the voter 

should try to defeat a party with whose aims he is in 

general sympathy, merely because of one man whom he 

dislikes or one measure which he disapproves. He must 

consider carefully the arguments which can be urged on 

both sides. But having taken those arguments into 

consideration, he ought to be guided by his reason and 

not by his inertia. Parties are likely to be so nearly 

even in numbers that many elections will be decided 

by two comparatively small groups of men : the corrupt 

and the intelligent. If the intelligent men stand by their 

party instead of voting independently, it will be more 

desirable for the party leaders to appeal to the corrupt 

vote by lowering the standards of their platforms and 

promises than to appeal to the intelligent vote by 

raising the standard of those platforms and promises. 

But if the intelligent men are also independent, the 

chances are that it will be more necessary to bid for 

the intelligent vote than for the corrupt vote. The 

leaders will have every incentive to do better instead 

of doing worse. The man who, having sense enough 

to find out what is right, does not take the trouble to 

[153] 



STANDARDS OF PUBLIC MORALITY 

do it, or does not have the courage to ad on his con- 
victions, ifl throwing away an influence which i> ab- 
solutely necessary for the promotion of good politics. 

Bui the American citizen lias a yet broader duty 
than tin'-. It is not enough to vote rightly on certain 
specific issues, or to enforce right idea- on certain spe- 
cific questions of politics and morals. We must get our 
mind- themselves into a judicial attitude. ruder the 
American ( institution the people (^ our country are en- 
couraged to judge of fact-, to take charge of the enforce- 
ment of the law, and to select leader- of the kind that they 
admire. The final test of our ability as a nation re-ts 
on the power of our people to judge of evidence quietly; 
to accept the operations of law, even when it works 
to their own hurt; to get ideals of success of the kind 
that will preserve the nation instead of those which will 
destroy it. Every man who publishes a newspaper 

which appeal- to the emotions rather than to the intel- 
ligence of it- readers, and to a less extent every man who 
lightly believes the statement- that he finds in ,-uch a 

newspaper, attack- our political life at a most vul- 
nerable point. Eveiy man, whether a member of tlu 4 

[154] 



THE POLITICAL DUTIES OF THE CITIZEN 

majority or of the minority, who regards the law as an 
enactment to promote one set of private institutions 
at the expense of another, or who cooperates in the 
passage and administration of laws in this spirit, 
makes himself responsible for the dangers of growing 
contempt of law. Every man who admires a public 
officer for success in serving himself rather than for suc- 
cess in serving others — who respects the man for getting 
the office rather than for deserving the office — shows 
himself to that extent unfit to be a member of a self- 
governing nation, and by influence and example di- 
minishes the capacity of the nation as a whole for self- 
government. These are the fundamental points of 
political ethics — these the fundamental issues in all 
questions of public morals. 

For the great political question before us is not whether 
this or that party shall be kept in power, or whether 
one law or another shall be passed. The question is 
rather whether our present system of government 
shall stand. The history of the world shows that free- 
dom is a very precarious possession, which a nation 
cannot continue to enjoy for many centuries unless 

[ 155 j 



STANDARDS OF PUBLIC MORALITY 

it uses it with exceptional wisdom. If people will 
employ liberty as a means of substituting self-control 
for externa] control, they can continue to have it. If 
they try to make it a pretext for getting rid of all control 
except that which is furnished by their own desires 
and whims and wishes, it is taken away by force of 
circumstances. The Athenian democracy, when it 
was composed of men trained in the habits of self- 
command, furnished a magnificent instance of what 
freedom can do in government and in morals, in art 
and in literature. But the children and grandchildren 
of the men who made Athens great could not endure 
the discipline which their fathers voluntarily accepted. 
By defiance of the law and by the pursuit of individual 
selfishness they brought the state to its fall. The Roman 
freedom lasted longer than the Athenian, because the 
Romans had been trained in a sterner discipline, and 
had a respect for law which stood them in good stead 
for generations. But when freedom became a pretext 
for selfishness, Home in its turn fell, first under the 
tyranny of the emperors, and later under the yoke of 
the barbarian. 

[ we ] 



THE POLITICAL DUTIES OF THE CITIZEN 

I am no pessimist. I do not see anything which 
warrants the fear that we shall repeat in the near future 
the experience of Athens or Rome — unless it be the 
mistaken complacency of those optimists who think 
that we can repeat the mistakes of Athens and Rome 
without incurring the penalties. But the danger is 
great enough to make it worth while to impress upon 
every citizen the duty of inculcating respect for law, even 
when that law hurts him. It is the underlying spirit 
of philosophical selfishness which is the chief element 
of danger — the theory that if each man does what he 
really wants to do, things will all go well. Every nation 
that has accepted this philosophy has begun to ride 
to its own destruction. I do not know what is the solu- 
tion of the divorce problem. I wish I did. But I do 
know that the worst thing about divorce at present 
is that so many people regard marriage as a thing to be 
made and unmade for purely selfish reasons ; and when 
this conception fully takes root, the days of a nation are 
numbered. I do not know what is the means of doing 
away with lynch law. I wish I did. But I do know 
that the most serious aspect of all the lynchings of which 

[157] 



STANDARDS OF PUBLIC MORALITY 

we hear, North or South, is the evidence of weakened 
authority of legal procedure, when brought face to face 
with the preconceptions and passions of the crowd. 

When any nation looks upon law as a thing which the 
individual may use when it suits him and evade or 
defy when it does not suit him, that nation is losing the 
main bulwarks of social order. To any man, whatever 
his position in the state, it has become the paramount 
political duty to defend the saeredness of law, not only 
against the active assaults which threaten to overthrow 
it, hut against the more subtle and dangerous attacks 
of a selfish philosophy which works to undermine it. 
lie must regard, and must persuade others to regard, 
liberty and the privileges which go with it as trusts 
to he used only in the public interest, and in behalf 
of the nation as a whole. 



[158] 



American Social 
Progress Series 



Edited by SAMUEL McCTJNE LINDSAY 

Professor of Social Science in Columbia University 



The American Social Progress Series is designed to fur- 
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and conciseness of treatment will be maintained so that 
these handbooks may be serviceable for collateral reading 
and class discussion in the various groups of persons who, 
in our colleges and educational institutions as well as in 
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the social problems of our own time. 



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Cloth, I27HO, $1.00 net; by ynail, $1.10 

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